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How to Boil Down Your Water Heating Bill

Home repairs, more efficient heaters can help save money


Water heating is the third largest energy expense in your home.

It typically accounts for about 12% of your utility bill.

There are four ways to cut your water heating bills: use less hot water, turn down the thermostat on your water heater, insulate your water heater, or buy a new, more efficient model.

Water heating tips

  •     Install aerating, low-flow faucets and showerheads.
  •     Repair leaky faucets promptly; a leaky faucet wastes gallons of water in a short period of time.
  •     Lower the thermostat on your water heater; water heaters sometimes come from the factory with high temperature settings, but a setting of 120°F provides comfortable hot water for most uses.
  •     Insulate your electric hot-water storage tank, but be careful not to cover the thermostat. Follow the manufacturer's recommendations.
  •     Insulate your natural gas or oil hot-water storage tank, but be careful not to cover the water heater's top, bottom, thermostat, or burner compartment. Follow the manufacturer's recommendations; when in doubt, get professional help.
  •     Insulate the first 6 feet of the hot and cold water pipes connected to the water heater.
  •     If you are in the market for a new dishwasher or clothes washer, consider buying an efficient, water-saving ENERGY STAR model to reduce hot water use. See Appliances for more information.
  •     Install heat traps on the hot and cold pipes at the water heater to prevent heat loss. Some new water heaters have built-in heat traps.
  •     Drain a quart of water from your water tank every 3 months to remove sediment that impedes heat transfer and lowers the efficiency of your heater. The type of water tank you have determines the steps to take, so follow the manufacturer's advice.
  •     Although most water heaters last 10–15 years, it's best to start shopping now for a new one if yours is more than 7 years old. Doing some research before your heater fails will enable you to select one that most appropriately meets your needs.

Long-term savings tips

  •     Buy a new energy-efficient water heater. While it may cost more initially than a standard water heater, the energy savings will continue during the lifetime of the appliance. Look for the ENERGY STAR and EnergyGuide labels.
  •     Look for the ENERGY STAR label on efficient water heaters in the following categories: high efficiency gas non-condensing, gas condensing, electric heat pump, gas tankless, and solar.
  •     Consider installing a drain water waste heat recovery system. A recent DOE study showed energy savings of 25% to about 30% for water heating using such a system.
  •     Consider natural gas on-demand or tankless water heaters. Researchers have found savings can be up to 30% compared with a standard natural gas storage tank water heater.
  •     Heat pump water heaters can be very cost-effective in some areas.

Solar water heaters

If you heat water with electricity, have high electric rates, and have an unshaded, south-facing location (such as a roof) on your property, consider installing an ENERGY STAR qualified solar water heater. The solar units are environmentally friendly and can now be installed on your roof to blend with the architecture of your house.

More than 1.5 million homes and businesses in the United States have invested in solar water heating systems, and surveys indicate that more than 94% of these customers consider the systems a good investment. Solar water heating systems are also good for the environment. Solar water heaters avoid the greenhouse gas emissions associated with electricity production. During a 20-year period, one solar water heater can avoid more than 50 tons of carbon dioxide emissions. When shopping for a solar water heater, look for the ENERGY STAR label and for systems certified by the Solar Rating and Certification Corporation or the Florida Solar Energy Center.

Long-term savings tip

    Visit the Database of State Incentives for Renewables & Efficiency to see if you might qualify for tax credits or rebates for buying a solar water heater.

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