One of the easiest home-improvement projects you can do to reduce your overall environmental footprint will take maybe 15 minutes and set you back less than $25: Install a water-heater blanket. The U.S. Department of Energy reports you can save $20 to $45 a year with this simple project.
A water-heater blanket is basically a small roll of fiberglass insulation with plastic backing that’s cut to the approximate size of a 60-gallon household water heater. It typically comes with several feet of very sticky, heavy-duty tape and a set of instructions for installation. You should read the instructions before you start, obviously, but the upshot is that you wrap it around the water heater — taking care not to block the thermostat or any vents — and tape it in place. That’s really all there is to it.
Because water-heater blankets are made of fiberglass insulation, you’ll want to wear gloves and long sleeves while you work so you don’t end up with itchy arms and hands.
I installed a blanket on our tired old water heater last fall to knock down our winter gas bills. (I took pictures at the time, but they subsequently vanished into the ether, which is what I get for not posting projects as soon as I complete them.)
The old water heater, which was installed in 1988, was having trouble holding proper temperature, and the blanket helped reduce that problem for a few months until we could afford to replace the whole appliance.
If you can afford a new Energystar water heater, by all means, get one. We finally did this spring, and we’ve enjoyed warmer showers and lower energy bills ever since. But if you’re stuck with an old one, you’ll find that $15 to $25 you spend insulating it will pay for itself and make your life a little easier in the meantime.
P.S.: Tip from my mom, copied from a comment below: “And if you have an electric water heater, put it on a switch and turn it off after everyone has showered. 20 minutes before you’re going to shower or do laundry, turn it back on. I can’t begin to count the $$ we’ve saved over the past 15 years doing this, and the inconvenience is minimal. I turn on the water heater as soon as I come home in the evening and we turn it off after the last shower that evening. Bills are MUCH lower.”