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The largest user of natural gas in your home, after your home’s furnace, is your water heater. As much as 25 percent of every energy dollar goes towards heating water.

laundry Most of the costs of operating a water heater is keeping the water hot when no one is using hot water! If you think about it, the average household really only uses hot water for just over an hour. A shower usually takes about 15 minutes and each laundry load takes just a few minutes for the washer to fill with hot water. The rest of that time, the water heater is firing up to keep the water sitting in the tank hot.

Water heaters -- especially those in unheated parts of the home, like a garage, during cold months -- lose heat quickly, making the heating element have to turn on more often and stay on longer to keep the water hot. This wastes energy and puts more wear and tear on your water heater, shortening its life.

Of all of the energy conservation measures you can take, installing a water heater wrap (also called a water heater blanket) is one of the most cost effective.

What are water heater wraps?
These are sheets of fiberglass batting attached to heavy plastic that are specially designed to wrap around the outside of your water heater tank. They insulate the outside of the tank, like a jacket, to slow the heat loss from the tank. The more insulated the tank, the better the water holds onto heat, so that the water heater can work more efficiently. That uses less energy and you save money. It also helps to extend the life of your water heater.

Who can benefit by a water heater wrap?
Any water heater with an R-value under R-24 can benefit by adding insulation. While today’s models are more energy efficient than ever, older models have lower R-values. Most models manufactured before 2001 need water heater wraps.

If you don’t know your water heater tank’s R-value, simply touch the outside of the tank. If it feels warm to the touch, it needs more insulation and you can save money with a water heater wrap.

How much can you save with a water heater wrap?
Adding insulation can reduce water heater standby heat loss by 25% to 45%, depending on the age and model of your unit, according to the U.S. Department of Energy. This will save you about 4% to 9% in water heating costs.

That equates to about $3 to $5 a month in lower natural gas bills. Insulating your water heater tank usually pays for itself in about a year. Most insulating wraps cost $20 to $30 at home centers.

What should you look for when buying a water heater wrap?
Water heater insulation kits have pre-cut water heater wraps and special tape to hold it in place. They are available in different sizes to fit different heaters and can be installed in about 30 minutes. Check your water heater’s instructions, or contact the manufacturer of your water heater, before purchasing an insulation kit because some water heater manufacturers prohibit the use of water heat wraps on their units.

The U.S. Department of Energy recommends installing an insulated hot water heater wrap that has a minimum insulating value of at least R-8.

heater wrap 

Can gas water heaters be wrapped?
Yes, you can wrap a gas water heater, but use extreme care to follow the instructions for proper installation. The Department of Energy also recommends the use of water heater insulation kits, rather than try to make your own. Special precautions are important when wrapping a gas water heater to prevent a fire hazard.

What special precautions are necessary when wrapping a gas water heater?

  • Do not apply insulation on the top of a gas water heater. There is a draft hood on top to allow air to enter the flue to maintain proper draft out of the chimney.
  • Leave at least 6 inches above the bottom of the heater uncovered to allow air to enter the burner properly.
  • Do not apply insulation below the drain at the bottom of the water heater.
  • Leave the thermostat access panel(s) uncovered.
  • Do not cover the temperature/pressure relief valve. It is sometimes located on the side of the water heater.

What other ways can you reduce your water heating costs?

  • By using less hot water, you will use less energy.
  • Clean and wash clothes using cold water as much as possible to reduce hot water usage. Set the proper water level for your laundry load size to conserve hot water.
  • Check your faucets for leaks that waste water and energy.
  • Install low-flow showerheads and faucets to conserve hot water. A new showerhead can save as much as $10 a year in water and energy.
  • Consider insulating your water pipes, even just the first three feet of pipes entering and leaving the water heater tank can save energy.
  • Lower your water heater's temperature setting to 120 degrees Fahrenheit.
  • Turn the water heat thermostat down or off when you’re gone for more than three days. Many new water heaters have a "vacation" setting you can use.
  • Twice a year (or every other month if you have hard water), drain a bucket of water from your hot water heater storage tank. This removes sediment which absorbs heat energy and results in higher heating costs.

When purchasing a new water heater, what energy saving features should you consider?
When purchasing a new water heater, the EnergyGuide makes comparison shopping easy. That’s the big yellow sticker on the outside of water heaters.

EnergyGuide

First, determine how much hot water your household uses during its busiest hour. Look for the “first hour rating” on the EnergyGuide sticker. It considers how many bathrooms and how many people are in your house to ensure that you don’t run out of hot water when the last person hits the shower. Then, select the size and type of water heater that best matches your needs.

The capacity is not the only thing to consider because natural gas water heaters work more quickly to heat water than electric, so a gas-fueled appliance produces more hot water in an hour. A gas water heater that holds 40-gallons may turn out as much hot water in an hour as a 65-gallon electric one.

Consider also the “energy factor,” the smaller number on the EnergyGuide sticker that measures the efficiency of the unit. The energy factor shows that electric models may make better use of energy than older gas models because gas will lose some energy out the exhaust vent. But it usually costs three times as much to heat the same amount of water with electricity compared to gas. So natural gas water heaters offer the most economy and will cost less to run.

Look at the big number in the center of the EnergyGuide sticker. That’s the estimated cost of the energy needed to operate that particular water heater for one year. With most water heaters lasting about 13 years, a more efficient water heater can mean significant savings over the life of the appliance.

For more information on shopping for appliances using the EnergyGuide, see Facts for Consumers from the Federal Trade Commission, here.