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Just like insulating your walls or roof, insulating your water heater tank is an easy and inexpensive way to improve its efficiency and save you money. If your water tank is new, chances are it is already insulated. If
you have an older tank, check to see if it has insulation with an R-value of at least 24. If it doesn’t, consider insulating it to reduce standby heat losses by 25- 45 percent. It can also save you 7-16 percent in water heating costs. This should pay for itself in about a year.

You can find pre-cut jackets and blankets for around $20. If you don’t know your water heater tank’s R-value, touch it – if the tank is warm to the touch, it needs additional insulation.

Here’s how to insulate your water heater tank:
Step 1: Turn off the water heater at the breaker panel.
Step 2: Measure the height of the water heater and cut the blanket to fit if necessary.
Step 3: Leave the top of the water heater open.
Step 4: Wrap the blanket around the water heater and temporarily tape it in place. Position the
blanket so that the ends do not come together over the access panels on the side of the tank.
Step 5: Mark the areas, then cut holes where controls are located. Electric water heaters have two panels on the side of the tank. Mark the area where the pressure relief valve and pipe are located. This will be a pipe that protrudes from the side of the water heater. 61116007
Step 6: Adhere the blanket. Be careful to line up the cut out areas and then tape it permanently in place.
Step 7: Turn the water heater back on.

For an electric water heater, you might also consider insulating underneath the tank. A ridged piece of insulation (or bottom board) will help prevent heat loss into the floor and could save you another 4-9 percent of water heating energy. On a safety note, the thermostat shouldn’t be set above 130 degrees on an
electric water heater with an insulating jacket or blanket on it because the wiring could overheat.