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9 Ways to Save Money on Water Heating

By the Hot Water NJ Team · Updated April 20, 2026 · 6 min read

Water heating is often the second-biggest energy cost in a home. Here are nine ways to trim it—some free, some worth the investment.

Water heating typically accounts for a sizable share of a home's energy use—often second only to heating and cooling. The good news: several proven changes can cut that cost, ranging from free tweaks to upgrades that pay for themselves.

Free or nearly free

  1. Set the thermostat to 120°F. Many units ship at 140°F, which wastes energy and risks scalding.
  2. Fix dripping hot-water faucets—a slow drip wastes heated water around the clock.
  3. Take slightly shorter showers and run full loads of laundry and dishes.
  4. Insulate the first few feet of hot-water pipe coming off the heater.

Small investments

  1. Add a water-heater blanket to older, poorly insulated tanks.
  2. Install low-flow showerheads and aerators.
  3. Flush the tank annually so the burner runs efficiently—book maintenance.

Dropping from 140°F to 120°F alone can shave several percent off your water-heating cost and cut scald risk for kids and seniors.

Bigger upgrades that pay off

  1. Upgrade to a tankless unit to eliminate standby losses.
  2. Switch to a hybrid heat pump heater for up to ~70% lower operating cost.

The maintenance multiplier

A neglected, sediment-filled tank can cost noticeably more to run than a clean one delivering the same hot water. Annual maintenance is the cheapest 'upgrade' there is—it keeps whatever unit you own running at its best.

Want a tailored plan?

We'll look at your current unit and usage and tell you which of these moves will save you the most. Call 973-834-8833.

Good to Know

Frequently Asked Questions

What temperature should my water heater be set to?

120°F is the sweet spot for most homes—efficient, hot enough, and safer against scalding than the 140°F many units default to.

Does a tankless heater really lower bills?

Yes—by eliminating the standby energy a tank uses to keep water hot 24/7. Savings are biggest in homes with moderate, spread-out hot-water use.

Need a hand from a licensed NJ water heater pro? Hot Water NJ installs, repairs, and replaces every type of water heater across Northern New Jersey—usually same day. Call 973-834-8833 or request a free estimate below.

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