Put your hand on your water heater. If it feels warm, install an insulating blanket around it. The colder the area the heater is in, the greater the heat loss. So if it's in the garage in the winter, or a basement you're going to be losing a lot of heat. The same is true if your water heater is more than 10 years old.
What You Should Know
Wrapping your water heater with a premade insulating jacket can save 5%-10% of the energy you've been using, or approximately 465 pounds of carbon dioxide a year.Easy Things You Can Do
Install an insulating jacket on your water heater. Insulating jackets are available at your local hardware store for around $10. Insulating your water heater will help prevent your tank from losing heat and reduce your annual water-heating costs by up to 10 percent.- Be careful that the jacket does not block any air vents or cover the thermostat or flue.
- If you have a relatively new water heater, it may have come installed with an insulating jacket.
Turn off your electric water heater if you will be away from home for more than a few nights. It takes about four hours to reheat the water when you turn it back on.
Replace your old tank with an energy efficient one. When shopping for a new water heater, there are lots of factors to consider: what size you need for your family, what type and how energy efficient it is, which will also save you money. The US Department of Energy offers helpful descriptions of the different types of water heaters available and how to determine the right size and fuel source for your home. Be sure to check out the rebates for energy efficient water heaters that you may be eligible for.
Source: You Can Prevent Global Warming: 51 Easy Ways (Jeffrey Langholz, PhD, and Kelly Turner), and 30 Simple Energy Things You Can Do To Save The Earth (Earth Works and PG&E)