Adding an insulating jacket cuts water heater energy use by almost 20%, that can cut as much as $6/month off an electric or gas bill for the average home. At that price buying the insulation will pay for itself within a few months and keep saving energy for years after. Insulating jackets sized just for water heaters are available at most hardware stores that stock major appliances. Try to find one at least 2-3 inches thick and close in size to your water heater.

Be careful when installing insulation on to gas- or oil-fired water heaters. Follow the instructions that came with the heater jacket carefully with these types of heaters. In general though – keep the insulation away from the drain or airflow vent at the bottom, the flue near the top, and don’t cover the top of the heater because it can interfere with the draft diverter and hot exhaust air. If in doubt, have a plumbing or heating contractor insulate the water heater for you.

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