The U.S. Department of Energy recommends setting the thermostat of a water heater to 120° for maximum efficiency. However, when it’s 30° outside and the inside of the home is not properly heated, the water heater will work harder to maintain a 120° water temperature which increases the amount of electricity you’re using. You can help offset this by insulating your water heater.

If you have a newer hot water heater, it may already be insulated; but if you touch the tank and it’s warm to the touch, then you would likely benefit from additional insulation. Insulating the tank could save you up to 16% in water heating costs and it’s a simple project you can do with just a little help from a friend.

Steps to insulate a water heater: 

1. Before starting this project you will need a tape measure, marker, scissors, water heater insulating blanket kit, gloves and dust mask, and electrical or other tape. You should be able to find these materials at your local hardware store.
2. Turn off the water heater. For electric heaters, turn off the breaker at the electric panel. For gas water heaters, turn the gas valve to the “Pilot” position.
3. Measure the height of the water heater and cut the blanket to fit. Do not cover the top of the water heater so not to block the vent on a gas unit.Wrap the blanket around the water heater and temporarily tape it in place.
4. Position the blanket so that the ends do not come together over the access panels in the side of the tank. Some tanks have only one access panel.
5. Mark the areas where controls are so that you can cut them out. Electric water heater units will have two panels on the side of the tank. For gas, you’ll need to mark an arch-shaped hole around the gas valves and burner.   Be sure to leave plenty of room around the valve and burner areas below.  Make the opening at least 1 inch wider than the valve and burner area.  Also, mark the area where the pressure relief valve and pipe are. This will be a pipe that sticks out of the side of the water heater.
6. Install the blanket. Line up the cut out areas and then tape the blanket permanently in place.
7. Turn the water heater back on. Don’t set the thermostat above 130ºF on an electric water heater with an insulating jacket or blanket – the wiring may overheat.