Water heating is the third largest energy expense in your home. It typically accounts for about 13%–17% of your utility bill. There are four ways to cut your water heating bills: use less hot water, turn down the thermostat on your water heater, insulate your water heater, or buy a new, more efficient model.
While buying a new energy efficient water heater may cost more initially than a standard water heater, the energy savings will continue during the lifetime of the appliance. Also, consider installing a drain water waste heat recovery system. A recent DOE study showed energy savings of 25% to about 30% for water heating using such a system.
If you heat water with electricity, have high electric rates, and have an unshaded, south-facing location (such as a roof) on your property, consider installing an Energy Star qualified solar water heater. The solar units are environmentally friendly and can now be installed on your roof to blend with the architecture of your house. Solar water heating systems avoid the greenhouse gas emissions associated with electricity production. During a 20-year period, one solar water heater can avoid more than 50 tons of carbon dioxide emissions.