Water Heater Efficiency: How To Save Money On Your Utility Bills

Here is How to Save Money on Your Utility Bills by installing more efficient water heaters in your home.

Your water heater is one of the most important appliances in your home, providing hot water for showers, cleaning, and cooking. However, it’s also one of the biggest energy consumers. Water heating can account for up to 18% of your utility bills, meaning an inefficient system can quickly add up to higher costs. Fortunately, there are steps you can take to improve your water heater's efficiency, saving both energy and money.

In this article, we’ll explore practical tips and upgrades that can enhance water heater efficiency and reduce utility costs without sacrificing comfort.

1. Insulate Your Water Heater Tank

If your home has a traditional tank-style water heater, adding insulation can significantly improve its efficiency. Most older water heaters are not insulated enough, leading to heat loss as the water sits in the tank. This causes the system to work harder to maintain the desired temperature, driving up energy usage.

How to Insulate the Tank:

• Insulate the Tank: Purchase an insulation blanket or jacket specifically designed for water heaters. These can be found at most hardware stores and are easy to install. Simply wrap the blanket around the tank, making sure not to cover the thermostat or burner compartment if you have a gas water heater.
• Check for Existing Insulation: Newer models often come with built-in insulation, so check the label before purchasing an insulation jacket. If the R-value (insulation rating) is 24 or higher, additional insulation may not be necessary.

Tip: Insulating your tank can reduce standby heat loss by 25%–45%, translating into energy savings of 7%–16% annually.

2. Lower the Water Heater Temperature

Many water heaters come pre-set to 140°F (60°C), which is hotter than necessary for most household uses. Lowering the thermostat to 120°F (49°C) can help reduce energy consumption without compromising comfort. In fact, the U.S. Department of Energy recommends setting your water heater to 120°F to achieve the best balance between energy savings and household needs.

How to Adjust the Temperature:

• Electric Water Heaters: Locate the thermostat on the side of the tank. Turn off the power to the heater, then remove the cover and adjust the temperature setting using a flathead screwdriver.
• Gas Water Heaters: For gas models, the temperature dial is usually located near the bottom of the tank. Simply turn the dial to the desired temperature setting.

Bonus Benefit: Lowering the temperature not only reduces energy costs but also minimizes the risk of scalding, making it safer for households with children or the elderly.

3. Upgrade to a Tankless Water Heater

For homeowners looking for a more energy-efficient and long-term solution, upgrading to a tankless water heater can be a game changer. Unlike traditional water heaters that store and heat water continuously, tankless systems heat water on demand, reducing energy waste.

Advantages of Tankless Water Heaters:

• Energy Efficiency: Tankless water heaters can be up to 30% more energy-efficient than traditional tank models, as they eliminate standby heat loss.
• Endless Hot Water: Since water is heated as needed, you won’t run out of hot water during long showers or when using multiple fixtures simultaneously.
• Space-Saving Design: Tankless units are much smaller and can be installed in tighter spaces, freeing up room in your home.

Note: While tankless water heaters have a higher upfront cost, the long-term energy savings can make the investment worthwhile. Over time, the reduction in energy bills will help offset the initial expense.

4. Fix Leaks Immediately

A leaking water heater, no matter how minor, can have a big impact on your utility bills. Even a slow drip wastes water, causing the system to work harder to heat it. Moreover, leaks can damage the surrounding area, potentially leading to costly repairs.

Common Areas for Leaks:

• Tank Leaks: Leaks at the base of the water heater usually indicate corrosion inside the tank. This is a serious issue and may mean it’s time for a replacement.
• Pipe Connections: Leaks can also occur at the inlet and outlet connections. Tightening these connections or replacing worn-out seals can often resolve the issue.

Regularly inspecting your water heater for leaks and addressing any issues promptly can prevent water waste and save you money on both your water and energy bills.

5. Use a Timer for Your Water Heater

If you have a traditional electric water heater, installing a timer can help you manage when the system heats water. Water heater timers allow you to turn off the unit during periods of low usage, such as overnight or while you’re at work. This reduces the amount of energy used to maintain the tank’s temperature when you don’t need hot water.

Benefits of a Timer:

• Energy Savings: By turning off the water heater when it's not needed, you can significantly reduce standby energy consumption.
• Convenience: Most timers are programmable, so you can set specific times for the water heater to turn on and off automatically.

While this tip works best for homes that use hot water primarily during certain times of the day, it can still contribute to overall savings, especially if you’re trying to minimize energy waste.

6. Schedule Regular Maintenance

Routine maintenance is essential for keeping your water heater running efficiently. Over time, sediment builds up at the bottom of the tank, especially in areas with hard water. This sediment reduces the heater’s efficiency by making it harder for the unit to heat water. Regular maintenance, such as flushing the tank, can prevent this buildup and prolong the life of your water heater.

Key Maintenance Tasks:

• Flush the Tank: At least once a year, drain the tank to remove sediment buildup. This improves the unit's efficiency and prevents potential damage.
• Check the Anode Rod: The anode rod helps prevent corrosion inside the tank by attracting corrosive elements in the water. Inspect the rod every two years and replace it if it’s significantly corroded.
• Inspect the Pressure Relief Valve: This valve prevents the tank from building up too much pressure, which could lead to a dangerous rupture. Test the valve annually to ensure it’s working properly.

Regular maintenance not only ensures efficiency but also extends the life of your water heater, reducing the likelihood of an untimely breakdown.

7. Install Water-Efficient Fixtures

Another way to improve water heater efficiency is by reducing the overall demand for hot water in your home. Installing water-efficient fixtures, such as low-flow showerheads and faucets, helps you use less hot water, which in turn reduces the workload on your water heater.

Water-Saving Fixtures to Consider:

• Low-Flow Showerheads: These reduce the amount of water used during a shower, saving both water and the energy needed to heat it.
• Aerated Faucets: Aerators mix air with water to reduce flow without compromising pressure, helping you save water in sinks and showers.

By using less hot water, you not only lower your water bill but also reduce the energy required to keep the water heater running efficiently.

Conclusion

Improving the efficiency of your water heater doesn’t have to be a daunting task. Simple actions like insulating the tank, lowering the thermostat, and fixing leaks can make a noticeable difference in your energy consumption and utility bills. For homeowners looking for a long-term solution, upgrading to a tankless water heater or installing energy-saving fixtures can maximize efficiency and reduce costs over time.

If you need help maintaining or upgrading your water heater, Ares Plumbing offers professional services to keep your system running efficiently year-round. By taking a proactive approach to water heater efficiency, you’ll not only save money but also contribute to a more sustainable home.