This happens because the water travels through pipes from the water heater to the faucet, and some of the pipes may pass through unheated sections of the house, such as the basement. Use a quality pipe insulation wrap, or neatly tape strips of fiberglass insulation around the pipes. Insulating your water heater storage tank is a fairly simple and inexpensive improvement that can help maintain the water temperature at the thermostat setting. Your local utility company may offer them at a lower price, give you a rebate, or even install them at no cost. When properly installed, a water heater blanket on an electric water heater will pay for itself in energy saved within one year.
Installation is more difficult on gas-fired heaters.
If your water heater is at least seven years old, you should carefully evaluate your water heating needs and investigate the types of heaters that could replace your current one. Although most water heaters last ten to fifteen years, early investigation and timely replacement can ensure a wise purchase. You may wish to consider the free or low-cost options before making large purchases. Also allow for circumstances that may be unique to your household when deciding on the appropriate options. Although it is not feasible to eliminate water heating in your home, it is possible to substantially reduce water heating costs without sacrificing comfort and convenience.