Energy Ratings Water heaters are rated for energy efficiency by a number which assumes a 64 gallon a day demand, and accounts for energy losses during the water heating process, standby losses, and pilot light losses. The ER number is a decimal value between 0.4 and 1.0 which reflects the percentage of total energy used which remains in the delivered hot water. Reduce standby losses from storage tank and pipes. Set water heater temperature to 120 degrees. If the house has a dishwasher which does not have its own booster heater, the water heater temperature may have to be set a bit higher, until the dishwasher washes properly.
Some soaps wash better than others at lower temperatures.
Every 10 degree reduction in water temperature results in about an 8 percent savings in energy use. Insulate the storage tank. Use wire or twine or straps to insure that the blanket stays in place. Set an electric water heater on a rigid foam insulation board. This step is most critical when the heater sits on a concrete slab, but it's always a good idea.