The Department of Energy estimates that water heaters account for 14 percent to 25 percent of our monthly energy bill. Little wonder, since most water heaters are on 24/7.
Water heaters are often factory-set at 140 degrees Fahrenheit, hot enough to scald. The Department of Energy says most of us can live comfortably with 120-degree water. You can save 3 percent to 5 percent on your water heating costs for every 10 degrees of setback.
To save even more, you can reduce hot water use with low-flow showerheads and faucet aerators, jacket the heater and wrap hot water pipes to minimize stand-by heat loss, and install a timer to take advantage of cheaper off-peak power.
"The quickest remedy is to set back your water temperature, but a tank insulator sleeve really helps a lot," says Lindstrom.
For greater savings, ditch the tank entirely and invest in an energy-saving, on-demand tankless water heater.
Cost: Free to adjust, inexpensive for attachments, $50 to insulate, $500 to $1,000 for on-demand systems.
Savings: 6 percent to 10 percent on water heating costs with 20-degree setback; 24 percent to 34 percent by going tankless.