Energy Conservation Tips

The appliances that use the most natural gas in your home are the furnace and water heater. In fact, as much as 25 percent of every energy dollar goes toward heating water. 

Water heaters lose heat quickly during the colder months -- especially water heaters in unheated parts of the home, like a garage. The heating element must turn on more often and stay on longer to keep the water hot. This wastes energy and puts 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 designed to wrap around the outside of your water heater tank. They insulate the outside of the tank, like a jacket, to slow heat loss from the tank. The more insulated the tank, the better the water holds onto heat. This allows the water heater to work more efficiently, using less energy and saving you money. It also helps to extend the life of your water heater.

Who can benefit with 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 tank’s R-value, simply touch the outside of the tank. If it feels warm to the touch, it needs more insulation. 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. 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 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 tape to hold the wrap in place. They are available in various sizes to fit different water heaters and can be installed in about 30 minutes. Check your water heater’s instructions or contact the manufacturer before purchasing an insulation kit. 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 R-8.

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 trying 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?

Consider insulating your water pipes. Doing this for 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? The EnergyGuide makes comparison shopping easy. That’s the big yellow sticker on the outside of water heaters.


  • 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 water heater.
  • Consider 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 with 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.