Spend Less to Operate your Water Heater

Insulate your storage tank and pipes. You can purchase insulation kits at your local hardware store. Avoid covering the thermostat. It's important to insulate your heater correctly. If you are not sure what to do or can't find a good "how to" guide, you should have a professional install it.

Clean the sediment out of your water heater. This can be done by draining a quart of water from the water tank once a month. The sediment impedes heat transfer and lowers the efficiency of your heater.

Hot Water Usage

Install aerators in faucets and low-flow showerheads. Aerators deliver a strong spray, but control your water consumption by mixing air with the water.

Repair leaky faucets quickly. It's amazing how much water you can waste in a short period of time when you have a leaky faucet.

Take showers instead of baths. On average, a 5 minute shower uses half as much energy as taking a bath. A longer shower might use as much water as bathing, so use your judgment on what method is best for you.

The good news is using a dishwasher tends to be the most efficient way to wash your dishes. Be sure to run full loads and use energy saving settings if your dishwasher has them. If you have an old dishwasher you might consider upgrading. You can get a new, efficient dishwasher that uses 5 gallons or less per load while an older dishwasher could use twice that amount. There have been a lot of advancements in dishwasher capacity and efficiency; a new dishwasher uses half the water and electricity than one sold in from the early 1970's. If you wash dishes by hand, keep in mind that a running faucet uses 2.5 gallons of water per minute so try not to leave the water running as you wash.
Purchasing a Water Heater

If you are in the market for a water heater you are going to want to buy a gas-fired heater if natural gas is available. It's more efficient than an electric water heater. If you don't have gas in your area, but live in a warm climate, you may want to look into solar water heaters.

The most efficient water heaters available are Demand (Tankless or Instantaneous) Water Heaters. Demand Water eaters have been used in Japan and Europe for decades. They have been available in the US; but until recently, have not been very common. Demand Water heaters use less energy because they heat the water as you use it instead of keeping a tank full of water warm 24 hours a day. They are more expensive to purchase but last 25% to 30% longer.