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Hot Water Heater Tips to Save Money & Energy

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When the outside air is cold, nothing feels better on your freezing fingers and toes than stepping into a steaming shower. But a long, hot shower may be costing you more than you think. In fact, your hot water heater accounts for 20% of your electricity bill. From simple adjustments to smart investments, discover ways to save money and energy with these hot water heater tips. 

Adjust Hot Water Heater Settings

Most hot water heaters are factory set to 140°F, but bumping the temperature down 10 degrees can save 3-5% on hot water costs. Plus, the hot water can be a scalding hazard for your skin. The Department of Energy suggests lowering the water heater thermostat to 120°F, though some experts say it needs to be hotter for sanitizing dishes. According to Consumer Reports, however, most dishwashers have a heating element to boost the water temperature when washing dishes. If you like the hot temperatures, initiate some of the savings below to make up the difference.

Smart Water Usage

  • Check for leaks on faucets or pipes, which could be costing you money you don’t see. Simple fixes include replacing washers or showerheads. More complex leaks may require a plumber.
  • Take showers instead of baths, which uses two-thirds less water. Plus, installing a low-flow showerhead saves about 20% versus a standard showerhead. Shortening your shower by just a few minutes saves gallons of water and heating costs.
  • Don’t rinse dishes before you load the dishwasher, which uses hot water twice. Many have the tendency to over rinse, and today’s dishwashers are able to handle food residue and grime. Make sure you always run a full load and use the appropriate setting. Run your dishwasher in off-peak hours, like overnight, for even more energy savings.
  • Use cold water settings for laundry. Today’s washing machines models and detergents can clean your clothes with cold water. Only extremely soiled clothes need warm or hot water, and rinsing in cold will still save costs with each load.
  • If it’s time to upgrade your large appliances, like your dishwasher and washing machine, consider Energy Star models. These tested models use about 30% less water than standard models.

Hot Water Heater Tips

  • Insulate your hot water tank and pipes. Wrap a big coat around your water heater and exposed pipes to keep moving water from losing its heat as it travels to the faucets in your home. This inexpensive fix (insulation blankets and wraps) can start saving you up to 16% on hot water costs every year. Click for instructions to insulate tanks and pipes here.
  • Check your tank’s sediment. This one may be out-of-sight-out-of-mind issue, but minerals may be building up on the bottom of your hot water heater, impacting its efficiency. This is especially true in areas with hard water. Check and drain your hot water heater once or twice a year — see your user’s manual or online instructions.
  • Install a timer. Did you know your hot water heater can sleep when you do? Traditional water tanks don’t need to be heated when not in use, so installing a programmable timer can result in automatic savings that you won’t even notice.
  • Upgrade your hot water heater. This is a bigger investment, but if your hot water heater is reaching the end of its 15-year run (the average), then consider a tankless water heater. Tankless on-demand water heaters are 40% more energy efficient and only heat water when you’re using hot water. If you can’t invest in tankless, today’s models of gas or electric are more energy efficient than older models. Check out this list of 10 Best Water Heaters of 2022.


A little bit of maintenance and a few small habit changes can result in noticeable savings on hot water costs every year. Payless Power, a retail electric provider in Texas, offers energy-savings ideas year round and affordable, no-deposit electricity plans – inquire today!

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