You may tend to forget about it, since it’s usually out of site, but your water heater is a large contributor to your energy bill. Every time you turn on a hot water faucet, have a shower or use your washing machine, your water heater is using energy to heat that water. And if you have a tank-type water heater that stores hot water it uses energy throughout the day to keep that water heated. So, what can you do to limit the energy usage of your water heater? Here are a few tips that will save you some money: Turn your water heater thermostat down Every water heater is equipped with a thermostat that controls how much the water will be heated. Even turning this thermostat down by as little as 10°F can reduce your bill by about $6 a month, and each 10° reduction will save about 3-5% of the operating cost. Water heaters really don’t need to be set higher than 120°, so if yours is set any higher than that consider turning it down. This is one of the easiest ways to reduce your water heater’s energy consumption. Reduce your hot water usage There are lots of ways to reduce your hot water usage without having any effect on your daily life. These include: Wash your clothes in cold water: With plenty of laundry detergents designed for cold water use now available there’s really no reason to wash your clothes in hot water. By doing this you can save up to $160 a year. Take showers instead of baths: On average, baths use 12-15 gallons of water, whereas showers generally only use 5-9 gallons. That’s a big difference. Wash your hands with cold water: This is a super easy one, and can save anywhere from $2-$8 a month. When replacing faucets, install dual handle faucets: If you’re remodeling your bathroom or replacing a faucet for any reason, consider installing dual handle faucets. With a single handle faucet it can be easy to use hot water when you really don’t need to. Even pushing the handle straight up will cause hot water to be drawn from the tank. With dual handle faucets avoiding using hot water is easy and can save you anywhere from $2-$8 a month. Repair any drips or leaks: Even small leaks cost you money. A minor faucet leak that drips hot water once per second costs you $2-$4 a month, so don’t put off getting it fixed. Insulate your water heater Insulating your water heater, the inlet and outlet pipes and the T&P valve can help keep water stored inside the tank hot, which means less power is needed to maintain the water temperature. The US Department of Energy suggests 2 ½” R-8 insulation. Many home centers also carry ready to use blankets for hot water tanks. Doing this will save you another $2-$8 a month. Regularly Flush Your Water Heater and Check the Anode Rod Performing regular maintenance on your water heater, including flushing and checking the anode rod will ensure that your water heater remains efficient and isn’t burning any extra energy. Invest in a More Efficient Water Heater Although initially more expensive than tank-type water heaters, tankless water heaters will save you money in the long run by using less energy. To learn about the pros and cons of tankless water heaters, and tank-type water heaters, click here.