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[an error occurred while processing this directive]Water Heater energy use...and how to save on it

 Last update: January 2016

The Lowdown

Water heating makes up about 18% of the average utility bill. (EPA)  Here's what works for saving and what doesn't.

Biggest Savings Little to No Savings
  • Installing a solar energy system
  • Using less hot water in the first place!
  • Getting a more efficient heater
  • Lowering the tank temp. from 140° to 110°
  • Lowering the tank temp. by less than 30°F
  • Water heater blanket
  • Water heater timer
  • Tankless water heater

Installing a solar water heating system is your best bet.  It'll likely pay for itself in as little as seven years, and after that your hot water will be essentially free.  Pretty much the only reason you shouldn't go solar is if you don't own your own home so you can't.  If the upfront cost scares you (~$5200), just get a loan.  And even if you're not planning on staying in your current home long-term, any investment you make in the solar system will increase the resale value of your home.  Mr. Electricity's family has been enjoying solar hot water for years, and Mr. Electricity himself really enjoys no longer being tethered to the gas company.

Barring installing a solar heating system, your next best bet is to simply use less hot water.  That's our next topic...

Use less hot water in the first place

You'll get the most savings by simply using less hot water.  Outside of installing a solar system, this is far and away the most effective way to reduce your water heating costs.  Here are your main strategies:
  • Wash your laundry in cold water.  Modern detergents don't need warm or hot water to get your clothes clean.  Washing in cold commonly saves $67/yr. with gas heaters and $161/yr. with electric.  (See the calculator for your own situation.)
  • Install a low-flow showerhead.
  • Turn the water off in the shower while you're soaping up or shampooing.  This is a lot easier if you install a cheap screw-in pushbutton switch, like those from Amazon or PlumbingSupply.
  • Take showers instead of baths.
  • Wash your hands with cold water.  If your faucet has a single handle, push it to the right to get only cold water, rather than straight up which gives you a mixture of hot and cold.
  • Fill water pitchers for the fridge with cold water.  Again, for single-handle faucets, push it to the right for cold water only, rather than straight up.  Don't pay to heat up the water and then pay to cool it down again with the fridge.
  • Repair any leaks.  Hot water leaks waste energy as well as water.  One drip per second of hot water costs you $2 to $4/mo. to heat water that you'll never use.

Get a more efficient water heater

Cheaper heaters cost less at the store, but you'll pay more in utilities.  Pay a little more for an efficient model and you'll save in the long run.  Here are your choices:

Savings from upgrading to a more efficient model

Gas tank,
Gas tank,
Energy Star
Electric tank,
Electric tank,
high effic.
Heat Pump
Cost to buy, w/8% tax $338
$1200 $5200
Monthly cost $30
$24 $0
Monthly savings over standard

$41 $26-62
Payback time vs. standard 7 years
6 years
2.4 years 7-16 yrs
Energy Factor 0.59 0.67 0.904
2.45 n/a
Note:  Your own costs WILL VARY according to how much hot water you use and your local rates for fuel.  See How to Misquote this website.  Assumptions: Tank size ≤55 gallons.  Annual energy use from EPA.  Energy rates are 16¢/kWh and $1.42/therm.  Prices for units from, 9/13, except Energy Star Electric Tank from Whirlpool and Lowes, Heat Pump from Home Depot 1/16, and Solar from Univ. of Central FL (+ heat pump heater cost).  Payback ignores delivery/installation costs because you'd have to replace your old water heater sooner or later anyway.  Energy Factors from the Water Heater Energy Factors table below.

Notes on the table:

  1. Gas vs. Electric:  Gas is cheaper, but if you don't already have gas service, getting it would likely wipe out any savings.
  2. Heat Pump heaters:  These are cheaper to run than typical electric heaters, but not gas heaters.  If you have gas, keep it.
  3. Solar: Solar is great, and pretty much the only reason not to get solar is that you don't own your own home.  If the upfront cost scares you, just got a loan. If you're wary because you don't expect to be in your home long-term, remember that any investment you make in solar will increase the resale value of your home.
  4. Summarized advice.
    1. Install solar if you can.  Otherwise...
    2. If you have a gas heater already, keep it until it dies, then replace it with an Energy Star model.
    3. If you have an electric heater and have existing gas service to your home, replace your heater with an Energy Star gas unit now.
    4. If you have an electric heater but don't have existing gas service, buy a heat pump heater now.

I don't include tankless heaters in the table because they're mostly hype and rarely pay for themselves.

Gas vs. Electric

Gas is almost always cheaper than electric, whether tank or tankless.
  For tanks, the energy cost is typically about $30/mo. for gas vs. $42/mo. for electric. (EPA PDF)  If you're already a gas customer but have an electric water heater, by all means, switch to gas now.  However, if don't already have a gas line serving your home, then switching from electric to gas water heating often won't save any money, because the cost of installing the gas line is high, plus you'll have to start paying $12+/mo. to the utility just to be a gas customer.

Electric tanks do offer some advantages over gas tanks:
  • Electric heaters are cheaper, because they're less complicated.
  • They're easier to install—no gas pipes required, no venting required.
  • They're safer (no fuel to leak or explode, no pilot light to go out leaking gas into home, no combustion byproducts).
  • If you don't have other gas appliances you can cancel your gas service and save $12+/mo.

Electric tanks are actually more efficient than gas tanks, because gas tanks constantly lose heat through the venting flue (about 6°F per hour [source]  However, electric heaters cost more to run despite their efficiency, because electricity is usually more expensive than gas.  (It's more expensive because power plant burns fossil fuels to make electricity with only about 33% efficiency, meaning 2/3 of the inputs are wasted.  When you heat with gas, you're heating directly, and cutting out the middle man.)

Electric tankless units cost as much or more to run as gas tanks.

Marketshare is 50% gas, 41% electric, and the rest is mostly oil.  Fuel type varies a lot by state:  in Florida, where it's warm and little energy is needed for water heating, 90% of water heaters are electric, since they're cheaper to purchase and install.  But in chilly New York, where more energy is needed to heat water, only 12% of water heaters are electric, since running electric heaters is pricey. (EIA 2005 p. 29, Consumer Reports, 2015)

Hybrid water heaters (aka air heat pump heaters)

Water Heater Energy Factors
Water Heater Flavor Energy Factor
Hybrid (air-based heat pump) 2.0-2.4 (1)
Electric tankless 0.96-0.99 (2) (EPA 2008)
Electric tank 0.86 - 0.95 (1,2) (EPA 2008 & page)
Gas tankless, Energy Star 0.82 (1)
Gas tank, Energy Star 0.67 (1)
Gas tank 0.56 - 0.70 (3)
Notes: While hybrid heaters are wildly efficient, they're not cheaper to run than gas, because gas is so cheap.  While tankless heaters have high efficiency, their high installation costs means they typically don't pay for themselves.  Figures reflect 2004 federal standards.  Pre-2004 models were worse. (See source #3, and LBL's historical averages.) Federal standards (non-Energy Star) will get tighter in 2015. (DoE, Table 3)  Sources: (1) Energy Star site, accessed 9/13. (2) DoE PDF, 2008.  (3) (DoE PDF, 2010, p.9)
There's a new kind of water heater that extracts heat from the air to heat the water.  This works even when the air is relatively cold (down to freezing).  These are called either heat pump water heaters or hybrid water heaters.  (The "hybrid" name is from the fact that there's a backup element to heat the water by electricity when there's not enough heat in the air.)

Because hybrid heaters are so efficient, it's now generally a better deal to install a solar electric system to power a hybrid water heater, than it is to install a solar water heating system to try to heat the water directly with solar. (GBA)

If you want an electric water heater >55 gallons, then current regulations actually require that you use a hybrid heater. (DoE)

Note that if you want to put your hybrid heater in conditioned space, then you'll want to duct it outside or to the attic so it doesn't steal heat from the house in the winter.
  Remember, hybrid heaters suck the heat out of the air, they make the surrounding air colder.  So that means either locating it in unconditioned space (like an unconditioned garage, basement, or attic), or else ducting it to a garage, attic, basement, or outside, so it gets its heat from air that you're not trying to heat by some other means.  If you don't do either of these, the penalty over a winter is about 800-2200 kWh. (DOE)

In the summer, letting your hybrid take heat out of your home is a plus.  Do that by either installing the heater in conditioned space, or ducting it to conditioned space.  Savings on cooling over a summer is up to 200 kWh, or $32 at 16¢/kWh. (DoE)

Hot Water Temperatures

104°F (40°C)

Good for most uses.  This is the temperature I used before I had a family, and needed more hot water.

120°F (49°C)

The temperature recommended by the Dept. of Energy.  This is the triangle setting on the dial on many (all?) gas water heaters.

122°F (51°C)

Bacteria from Legionnaires Disease can grow in water up to 122°F, though authorities say the risk is small. (EPA, OSHA)

130°F (54°C)

Water this hot will give you third-degree burns in 30 seconds.  This is the "A" setting on the dial on many (all?) gas water heaters.

140°F (60°C)

Gives you serious burns in less than 5 seconds.  This is the "B" setting on the dial on many (all?) gas water heaters.   OSHA says you might want to run your heater at this temp to kill bacteria; others crank their heater up to 140°F just once a week which is cheaper than running 140°F constantly.  (I never do.)  Hotels, often deliver water to faucets at this temperature, and have gotten a lot of flak for it because of the danger of scalding.  (AllStays.coml)

149°F (65°C)

Third-degree burns in 2 seconds.  150° is the "C" setting on the dial on many (all?) gas water heaters.

156°F (69°C)

Third-degree burns in 1 second.

160°F (71°C)

Third-degree burns instantaneously.  This is the "Very Hot" setting on the dial on many (all?) gas water heaters.

178°F (81°C)

Solar water heaters can easily reach this temperature even when it's below freezing outside.  (The system is typically set to stop heating well before it gets to this level.) (YouTube)

Burn temperatures from The Burn Foundation.

When lowering the thermostat helps, and when it doesn't

Lowering the thermostat often doesn't help that much, if at all.  That's because when the tank temp is lower, you'll simply draw more water from it, so the energy required to heat the water you use is the same.  Here's an example: Let's say you want your bath to be 104°F.  If your tank is set to 104°F then you'll use lots of tank water, without mixing in any cold.  If your tank is set to 140°F then you'll use only a little bit of tank water, mixing in lots of cold.  Either way, it's about the same amount of energy to make a 104°F bath.

Same deal with your washing machine and dishwasher.  Any model made within the last several years regulates the temperature.  If your tank is hot then it'll draw less water and mix in lots of cold, while if it's not so hot then it will draw more hot water and mix in less cold.  Here again, the energy for heating the water you use is about the same.

So here are the cases in which lowering the temperature does save energy:
  1. You're using a hybrid heater and you use a lot of hot water.  While hybrids are efficient, they can heat only about 8 gallons an hour.  If your hot water is exhausted and you still need more, then the electric backup will kick in, raising your bill.
  2. You have an ancient washing machine which doesn't regulate the temperature, and you frequently wash in hot or warm.  Of course, the better solution here is to simply wash in cold.
  3. You have an old dishwasher which doesn't regulate the temperature.  (And unlike your washing machine, dishes should definitely be washed in hot water.)
  4. Your heater is in an outside closet that's not sealed well (either because it's gas and needs venting, or because the closet is just old or poorly constructed), and your heater doesn't have a water heater blanket.
The Department of Energy says that every 10° reduction saves 3-5%, (DoE)  so for $25 of usage, lowering the temperature from 130°F to 120°F would save only about $1/mo.  Lower it from 140° to 110°F (30° drop) then your savings are closer to $3/mo.  Remember, the savings is from only the usage part of your bill, and a $40 gas bill might have $15 or so of customer charges unrelated to how much gas you actually use.

Shouldn't a higher tank temperature mean higher standby losses?  Not really.  We cover Standby Losses further down on this page.

One potential problem with lower temperatures is that, at least in theory, Legionnaire's Disease bacteria could be encouraged to breed.  For that reason OSHA recommends maintaining the temperature at 140°F, though DoE says that 120°F is "considered safe for the majority of the population", and it's what they recommend for most users.  Note that while 140°F reliably kills germs in gas tanks, they can still survive in 40% of electric heaters set to 140°F since the water at the bottom of the tank might not get that hot.  (Gas heaters kill the germs better, since the temperature in gas heaters is more uniform.)

It might look to you like a lose-lose situation:  You either run the risk of scalding with a high set temp, or the risk of bacteria growth with a low set temp.  But you actually have a couple of options.

    1. You can crank the heater up to 140°F once in a while, rather than running it at 140°F constantly.  I ran my own tank for years at 105°, then I heard about Legionnaire's, so I cranked it up to 140° for a few hours.  Not long after that I got a solar system, which often gets the tank up to 150° on its own.
    2. You can install a tempering valve on the heater which mixes cold water with the hot as it exits the heater, so you can have bacteria-frying hot water in the heater, and safe levels of hot water at the tap.

And even after all this discussion about temperature, the truth is that you can't really set the exact temperature of your heater anyway, since gas heaters especially and electric heaters to some extent operate on a range around the temperature you set.  One water heater manual says that if you set it to 120°F, the possible range of temperatures at the tap is 90°-150°F! (PDF, p. 16)

Here are pictures showing how to adjust your tank temperature.

Things that save little to no money

What works best is using less hot water, or upgrading to a more efficient heater.  Here's what doesn't work so well:

What doesn't save much money
Why it doesn't save much / any money
Lowering the tank temperature
  • A 10°F reduction saves only around $1/mo.
  • When the tank temp. is higher, you use less tank water.  Nobody takes a 140°F bath.
  • Modern washing machines regulate the temperature.  If the incoming water is too hot, the washer mixes in cold, using less overall hot water.
  • Standby losses aren't that great, because the water in the tank usually gets used before it can lose much heat.

Water heater blanket
  • Standby losses usually aren't that great.
  • Modern water heaters are already well-insulated.  The savings for older heaters could be up to $4/mo (DOE), but only $2/mo. for more modern (post-2004) heaters.(EPA)  There's no downside, and the $24 blanket will pay for itself in about a year, but the savings aren't dramatic.
Water heater timer
• Standby losses usually aren't that great.

Tankless water heater
• Gas tankless models save only $9-15/mo. if you're lucky. Often there's no savings at all.
• Tankless models cost $650 to $1650 more to install than tank heaters.
• Tankless heaters often promote water waste, increasing water bills (see below).
• Tankless heaters require more maintenance, which erases the savings.

Tankless water heaters:  Mostly hype!

Tankless heaters purport to save energy by having a greater portion of the fuel going to heating the water, rather than being lost up the flue.  That's a nice sales pitch, but the truth is that the monetary savings are meager, and the high upfront cost means that payback time could easily be 20 to 40 years.  Tankless heaters also promote water waste, are more likely to break down, are more expensive to repair when they do break, have shorter warranties, and have other problems.  For more, see my page Ten reasons you don't want a tankless water heater.

Standby Losses

Standby losses is heat the water loses to the surrounding air while sitting in the tank waiting to be used.  This includes heat lost through the walls of the tank ("jacket loss", 4.5%, or 2771 BTU over 24 hours), and for gas heaters, heat lost up the flue stack (17.5%).(CEC, PDF, 2008, p. 42)  Blankets, timers, and lowering the tank temperature all try to save money by reducing standby losses, but they don't actually save that much because modern heaters are insulated well.

One person measured the standby losses on an unused 120°F electric tank, finding that they were 1.1 kWh/day (or 33 kWh/mo., which at 16¢/kWh is $5.28).  That's significant, but there still aren't much savings to be had here.  If we tried to save money by lowering the temperature, then we'd save the whole $5.28 only if we dialed the temperature all the way down to the room temperature, which of course defeats the whole purpose of having a hot water heater. If we dialed it down to 106°, we'd save considerably less than $5.28/mo., which isn't very much.

If the room temperature was 75°F in the above test, then that's 0.61 kWh per degree-F.  Lowering the tank temperature from 140°F to 110°F would thus be 30°F x 0.61 kWh = 18.3 kWh saved per month.  (I know, heat loss isn't perfectly linear, but it's close enough.)  At 16¢/kWh, that's $2.92/mo.

R-Values for water heaters are hard to find. (Many manufacturers don't publish them, preferring to instead communicate overall efficiency through the Energy Guide label.)  But here are some from Bradford White.

How much hot water leaks cost you

To calculate this I painstakingly spent almost twenty minutes counting how many drips it took to fill a half-cup measuring cup.  (539 drips, thank you very much.)  Man, what I do for my readers.  Anyway, from there the math is simple.  Here's how much water per month is wasted at various drip rates, along with how much this costs you for energy, assuming $1.42 per therm for gas and $0.16/kWh for electricity, and not considering the cost of the water itself.
  • 3 drips per second:  457 gallons/mo.  ($5.78/mo. gas;  $12.14/mo. electric)
  • 2 drips per second:  305 gallons/mo.  ($3.87/mo. gas;  $8.10/mo. electric)
  • 1 drip per second:   152 gallons/mo.  ($1.98/mo. gas;  $4.05/mo. electric)
  • 1 drip per 2 seconds: 76 gallons/mo. ($0.99/mo. gas;  $2.02/mo. electric)
  • 1 drip per 3 seconds: 51 gallons/mo.  ($0.66/mo. gas;  $$1.35/mo. electric)
  • 1 drip per 4 seconds: 38 gallons/mo.  ($0.50/mo. gas;  $1.01/mo. electric)
Note that this differs sharply from the figures given by the Illinois Rural Water Association (PDF).  (Theirs are much lower.)  But since I counted out every drop myself, I'm confident in my numbers.  Besides, IRWA doesn't say how they arrived at their figures.  For all we know, they read them in the National Enquirer or overheard some crackheads spouting those figures in some back alley somewhere.  Fortunately, my numbers are indeed close to those put out by the U.S. Geological Survey.  I get 17,248 drips per gallon, they get 15,140.

More tips for saving money with a standard tank heater

Here are some additional tips for those who want to eke out even more savings:

  1. Wrap your old heater in a special tank blanket, available from your friendly home improvement store.  The savings for older heaters could be up to $4/mo (DOE), but only $2/mo. for more modern (post-2004) heaters.(EPA)  There's no downside, and the $24 blanket will pay for itself in about a year.

  2. Use a water heater timer on older (pre-2004) heaters.  A timer turns off your heater automatically when you go to work, then back on right before you come home, off after you go to bed, and on again right before you get up.  They're available for both electric and gas models.  They don't save as much money as you'd expect, though.  That's because standby losses just aren't that great.  A typical electric water heater only runs about three hours a day anyway, and modern energy-efficient water heaters run only 1.3 hours or so.

    A timer for an old electric heater costs around $40 and saves about 25kWh/mo. for a family of two using 40 gallons a day with the heater off four to six hours a day, but only 14kWh/mo. for a family of four using 80 gallons a day. (Florida Extension Service)   A gas water heater timer goes for about $110, and is user-installable.  (See our separate page on how to install a water heater timer.)

  3. Insulate your hot water pipes. Your home improvement store sells insulation that simply fits around the pipes.  This is an easy do-it-yourself job.

  4. Insulate the room where the heater is.  The colder the environment where the heater is, the higher the standby losses.  And the heater it's in a garage and it's cold outside, keep the garage door closed!

  5. Take advantage of utility promotions. Some utility companies like Dakota Electric will install a special water heater which heats primarily at night for a lower kWh rate. (In Dakota Electric's case, only 3¢ per kWh.)

  6. Turn it off when you're out of town.  For electric heaters without a switch, you can turn it off at the breaker box.  For gas heaters, follow the instructions printed on the heater.  (Usually you can just turn the thermostat, NOT the gas knob, to OFF —unless it's an electric-ignition model or you feel you're competent to re-light the heater when you return.)

  7. Drain the heater once a year.  That makes it more efficient, and prolongs the life of the heater.  Here's what I feel is the very best video on how to drain the heater.

  8. Install a drain recovery system.  A drain recovery system uses the heat from the water flowing down the drain to preheat water entering the heater.  A system like the one by GFX saves $180 to $340 a year when used with an electric water heater according to the manufacturer, and prices start at $334.  These are really only suitable for homes with basements or bathrooms on the second floor, because access to a vertical drainpipe is needed.

  9. More tips:  Gene Hayes has the ultimate list of ways to save on water heating.  It's stunning in its comprehensiveness.

Water Heater Repair & Maintenance

If your water heater gives up the ghost then obviously your first call should be to the professional installer you used.  If you bought a tankless model on Amazon and used some fly-by-night installer who's no longer around, then contact the manufacturer and ask them who's authorized to work on heaters in your area.  For example, in all of Austin, Texas there's only one certified Rheem installer.  When my Rheem heater died, Rheem shipped the new parts for free and paid for the repair, since there was a known problem with the model I bought.

If you want to try to fix your heater yourself (or do some preventive maintenance), here are some good pages:


  • Tankless heaters are supposed to be flushed with vinegar annually to clear out scale buildup.  You'll have to buy a pump, hoses, and possibly hose adapters.  Here are instructions for deliming a tankless heater.
  • Gene Hayes on troubleshooting your broken Rheem or Bosch tankless water heater.


Gas water heater pilot light

The pilot light in a gas tank water heater uses about 3.3 to 4.2 therms/mo. (source)

2015 efficiency standards

New federal standards for water heater efficiency kicked in on April 16, 2015.  For tanks that are 55 gallons or less (which is most of them), new heaters will be about 4% more efficient on average, and will need only an inch or two more space.  However, for some homeowners that inch or two will mean that their water heater closet has to be enlarged to meet local building codes.  Check with your city on that one.

For tanks >55 gallons, the requirements are so strict that your new heater will incorporate new technology:
  • Gas heaters will be the condensing type
  • Electric heaters will be hybrid, heat pump style
These newer heaters are bigger and are more likely to require an expanded closet.

Sources for this section: DoE, AO Smith, Consumer Reports

Yet even more

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All advice is given in good faith. We're not responsible for any errors or omissions. Electricity can kill you; if you're not competent to work on your electrical wiring then hire a professional to do it.
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