You probably never think about your water heater until it quits. Meanwhile, it’s been running up your utility bill every hour of every day.
Heating water is typically the second-biggest energy expense in a home, eating up about 18% of the energy you use, according to the U.S. Department of Energy. The DOE puts the typical household’s cost at roughly $400 to $600 a year.
That’s money you can claw back, and most of it doesn’t require a plumber. Here are six ways to do it, starting with one that takes about a minute.
1. Turn it down to 120 degrees
Some water heaters leave the factory set to 140 degrees Fahrenheit, but 120 degrees is plenty for most households, according to the DOE. (One exception: If your dishwasher doesn’t have its own booster heater, check its manual before you turn the water heater down.)
That extra 20 degrees isn’t free. The DOE says a tank set at 140 degrees can waste $36 to $61 a year in standby heat loss, which is the heat that leaks out while the water sits there waiting for you.
It’s also a safety issue. Water that hot can scald, a real concern if you have young grandchildren or older adults in the house.
Check your owner’s manual for where the thermostat is and how to adjust it, then turn it down. If the showers start running cold, nudge it back up a little.
2. Wrap the tank and the pipes
Put your hand on your water heater. If the tank feels warm, it’s heating your basement or garage on your dime.
The DOE says insulating a warm tank can cut water heating costs by 7% to 16% a year.
On a $500 annual water heating bill, that’s $35 to $80. Insulating the hot water pipes can save another 3% to 4%, the agency says, and lets you lower the thermostat setting even more.
Insulating jackets and foam pipe sleeves are sold at any hardware store. Follow the instructions for your heater, especially if it runs on gas, and check your owner’s manual first. If the tank is cool to the touch, skip the jacket and just do the pipes.
3. Swap your showerhead
A standard showerhead pours out 2.5 gallons a minute. Models with the EPA’s WaterSense label use no more than 2 gallons a minute, according to the agency.
That sounds small until you add it up. The EPA figures a typical family would use about 2,700 fewer gallons a year by switching. Because much of that is heated water, the swap could also cut electricity use by over 330 kilowatt-hours a year.
You pay twice for every gallon that goes down the drain: once for the water and once to heat it. A new showerhead is one of the cheapest upgrades in your house, and you can install most of them with nothing more than a wrench.
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4. Wash your clothes in cold water
Here’s a number that surprised me. About 90% of the energy a washing machine burns goes to heating the water, according to Energy Star. The motor gets only around 10%.
So make cold your default setting, and save the hot cycle for the truly grimy stuff.
While you’re in the laundry room, give your dryer some attention, too. A clogged vent wastes energy and can start a fire. Here’s how to clean a dryer vent.
5. Drain out the sediment
Minerals in your water settle to the bottom of the tank over time. That sludge gets in the way of heating, so your heater has to work harder to do the same job.
The DOE recommends flushing about a quart out of the tank every three months to clear out the sediment. Check your owner’s manual for the right way to do it on your model.
This kind of routine care matters for all your big appliances. Plenty of expensive breakdowns are self-inflicted, as we explain in “8 Ways You’re Wrecking Your Most Expensive Home Appliances.”
6. Replace it before it fails
A conventional tank water heater lasts 10 to 15 years, according to the DOE. If yours is in that range, start planning now, rather than waiting for it to pick the worst possible moment to quit.
The stakes are bigger than a cold shower. Homeowners insurance claims for water damage and freezing — from all causes, not just water heaters — averaged $15,400 each from 2019 through 2023, according to the Insurance Information Institute.
While you’re thinking about it, make sure your policy covers what you think it does. You can compare homeowners insurance options here.
When you do replace it, take a hard look at a heat pump water heater.
Energy Star says these models can be up to four times as efficient as conventional electric water heaters and can save a family of four about $550 a year, or more than $5,600 over the heater’s life.
One warning: Don’t count on a tax break to help pay for it. The federal energy efficiency credit that once covered heat pump water heaters expired at the end of 2025, according to the IRS. Check with your utility for rebates instead.
What about tankless, or “instant,” water heaters? Instead of keeping a tank of water hot around the clock, they heat it as it flows through. Energy Star says a certified gas tankless model can save a family of four about $95 a year on gas compared with a standard gas tank, or about $1,800 over its life, and it can last about 20 years.
The tradeoffs, according to the DOE: They cost more up front, and they put out only about 2 to 5 gallons of hot water a minute. A big household running two showers and the dishwasher at once may need more than one unit.
Put all six of these together and you could shave a meaningful chunk off one of the biggest bills in your house. With winter on the way, it’s a good time to tackle your heating costs, too. Here are seven moves to make before the first cold snap.
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