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Many folks do not realize that heating water accounts for over 15 percent of the energy used in a home. High efficiency water heaters can use up to 50 percent less energy than a regular model. Here are some additional tips to lower your energy bills even further.

As mentioned, make sure that you buy a energy efficient model. Many people do not want to shell out the money for a quality, high efficiency water heater but in the long run you will save lots of money.

Also, you might want to consider purchasing a tankless model which instead of having to continually heat 50 gallons of water, it will only use energy when you need hot water. This can save a significant amount of money in the long term. Buy the proper size for your family's hot water needs because if you buy one that is too large, it will require more energy to heat than is actually needed. Just make sure you don't buy one that is too small or you might be taking cold showers!
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Natural gas is more cost efficient than electric when it comes to heating water so if at all possible buy a gas water heater. If you have a electric heater now, you can replace it with gas depending on location and how much cost would be involved.

The closer you can install the hot water heater to the kitchen the better because the kitchen is where the hottest water is generally used. This way the water does not have to travel a long distance in the pipes which causes heat to be lost along the way. When pipes are exposed in any location, try to wrap them in foam or pipe tape as this can save you money annually.

Most hot water heaters are set from the factory at about 125 degrees. You can lower this about 5 degrees and still have very hot water when needed while saving energy. Some people have settings of 135-140 degrees which is unnecessary, wastes energy, and can cause serious burns. To do this you simply remove the cover plate on a electric hot water heater and adjust the thermostat. This is one of the easiest ways to save energy that many people are not aware of.