There are 5 simple ways to lower your water heating bills, try one or more of these energy-saving strategies:
1. Reduce your hot water use
Wash most your clothes in cold water;
install low-flow fixture;
purchase energy efficient washer and dish washer;
fix any faucet leaks.
2. Lower your water heating temperature
You don’t need any temperature higher than 120ºF.
3. Insulate your water heater tank
Use pre-cut blankets to insulating your storage water heater tank. The cost is less than $25.
4. Insulate hot water pipes
Use quality pipe insulation wrap, or neatly tape strips of fiberglass insulation around the pipes, especially within 3 feet of the water heater.
5. Install heat traps on a water heater tank
Heat traps allow water to flow into the water heater tank but prevent unwanted hot-water flow out of the tank. The cost is about $30-40.
Source: EERE