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In our quest to lower our energy bill and in essence reduce our energy consumption, we completed a few list items with regards to hot water.  We installed a hot water tank insulation blanket, lowered the preset on the tank and ran insulation from the hot water tank to the faucets.

I've read that if your water heater is new you may not need an insulation blanket.  Rule of thumb seems to be if you place your hand on the water heater and feel warmth, then you will save money using a thermal blanket.  For the minimal cost of $20-$30 dollars I think it's a wise investment either way.  Wrapping the heater with an insulation blanket can reduce heat loss by up to 45% and save you approximately 4% to 8% in electricity cost to heat your water.  We plan on also sitting the tank on a rigid insulation foam board which is supposed to further reduce heat loss through the floor.  Another item we're looking at installing is Anti-Convection Valves, but still researching these to see if it makes sense.

Before we put the insulation blanket on the water heater we turned the temperature down to 120F.  It was preset to 145F and so far showering has not been a problem ;o)  This move not only helps save on energy, but makes our taps safer for our young son, win-win.

Last thing we did in this project was wrap the copper pipes with foam insulation.  There are a few choices of wraps, but we went with foam pipe wrap simply for the cost and ease of installation.  We hope to see a substantial return on investment.  Total cost was $25 for the insulation blanket and $15 in foam insulation.  The insulation blanket went on pretty easy with minor trim for the power cable.  We used Tyvek tape usually used for house wrap vapor barrier to attach the blanket together.  Tyvek is by far the best adhesive tape for this job, which was also used to keep the foam insulation together as well.

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