To determine if adding an insulation blanket would improve the energy efficiency of your water heater, touch it. Water heaters manufactured within the last decade or so have more insulation than older models, so the shell will not feel noticeably warmer than its surroundings. They don’t need additional insulation. In fact, manufacturers nowadays discourage adding insulation and most state that it will void their warranty if you do. 

   But if you have an older water heater and it is warm to the touch, the U.S. Department of Energy provides instructions on the best way to insulate your water heater at: http://energy.gov/energysaver/projects/savings-project-insulate-your-water-heater-tank. They estimate that the project will take about an hour and a half for the average homeowner to complete, cost about $30, and reward you with $20 to $45 a year of energy savings.

   We are not big fans of water heater insulation because the wrap makes it difficult for us to determine the condition of an older water heater, and observe any corrosion or beginnings of leakage—which is the way old water heaters fail. This also means that you will not get any early warning signs of impending tank failure either.

   Another consideration is that, if your water heater is old enough to get an energy-savings boost from an insulation wrap, then it is also at or near the end of its lifespan. The investment of time and money to install an insulation blanket makes no financial sense if the water heater is replaced in a couple of years.

   Whether or not you decide to wrap your water heater with an insulation blanket, there are also other ways to save on your hot water expense:

• Insulate the hot water pipes
• Lower the tank temperature to a recommended setting of 120º F
• Replace old shower heads with a new low-flow model
• Install a timer

    Also, see our blog posts What's that powdery crust on the pipe connections at the water heater? and What are the most common installation mistakes with water heater replacement? 

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Here’s links to a collection of more blog posts about WATER HEATERS:

• What is a "tabletop" water heater?

• Are water heaters required to be raised off the floor? 

• Can a Temperature and Pressure Relief (TPR or T&P) valve be mounted to discharge horizontally?

• Where are gas water heaters not allowed to be installed?  

• Is the minimum size water heater inlet pipe 1/2" or 3/4" according to the building code? 

• Can you use a light switch for a water heater disconnect? 

• How can I tell if a water heater is HUD-approved for mobile/manufactured homes?

• Can you wire a 240-volt water heater with 120 volts? 

• Is it alright to have a shut-off valve on both the hot and cold water pipes at a water heater?  

• What is the minimum clearance to doors and windows for an outdoor tankless gas water heater? 

• What is required clearance for access and working space in front of an electric water heater? 

• Why is the water heater older than the house? 

• Does a water heater need a shut-off valve? 

• Why should a tankless water heater have an isolator/service valve kit installed?

• When was a gas water heater first required to be elevated 18 inches above a garage floor?  

• Can the temperature and pressure relief (TPR) valve discharge pipe for a mobile/manufactured home water heater terminate under the home? 

• What is the purpose of a thermostatic mixing valve above a water heater? 

• Does a tankless gas water heater still work with no electricity during a power outage?  

•  Why do water heaters have a sacrificial anode? 

• What is the difference between a manufactured/mobile home water heater and a regular water heater? 

• Does a tankless water heater require a pressure relief valve?

• When is a water heater drain pan required?

• Why is there water in my water heater drain pan?

• What does it mean when a water heater Temperature/Pressure Relief (TPR) discharge pipe is "trapped"? 

• Can I leave a gas water heater in place when remodeling a garage into a family room or bedroom? 

• Where do I find the water heater in a mobile home?

• Does a tankless water heater in an attic require a drain pan? 

• Does an electric water heater require a disconnect? 

• Is a catch pan and drain piping required for a replacement water heater?

• What is the difference between a single element and dual element electric water heater? 

• What is an FVIR water heater?

• What is a heat pump water heater?

• What is a dielectric union?

• Why is my water heater making strange (rumbling, gurgling, knocking or banging) noises? 

• What can I do to make my water heater last longer?

• How can I determine the age of a water heater if the serial number is missing or decoding it is impossible? 

• How does a hydronic heating system work?

• What is the difference between a regular water heater and a direct vent water heater? 

• What is the difference berween a regular water heater and a power vent water heater?

• What is backdrafting at a gas water heater? 

• How do I determine if a water heater is gas or electric?

• What does it mean when a gas appliance (water heater, furnace, or range) has been "red tagged"?  

• What's the valve with the flip-up handle on the water heater for?

• Why is an older water heater an insurance problem?

   Visit our PLUMBING and INSULATION pages for other related blog posts on this subject, or go to the INDEX for a complete listing of all our articles.