Repair leaky faucets. Hot water leaking at a rate of 1 drip per second can waste up to 1,661 gallons of water over the course of a year, and waste up to $35 in electricity or in natural gas. Fixing drips is a cost-effective and easy way to save energy.
Install low-flow aerators and fixtures. An average family can save as much as $50 to $75 per year on water and sewer bills by switching to low-flow shower heads and low-flush toilets.
Turn off the faucet. To save water, be sure to turn off the faucet when brushing your teeth, shaving, or rinsing dishes by hand.
Wash only full loads. Your clothes washer and dishwasher use about the same amount of water whether you wash a full load, or just one item.
Purchase the correct size water heater. Consider the hot water needs of your family. If your water heater is too large, you will waste energy; if it is too small, you will likely run out of hot water.
Set the water thermostat to 120 degrees. With every 10-degree reduction in water temperature, you can save 3% to 5% in water-heating costs.
If the doors to the closet that houses your hot water heater have louvers or grills, do not cover or set anything in front of them.
Wrapping a fiberglass blanket around your electric water heater and securing it with duct tape, or installing a ready-made insulation kit can save up to 10% on water heating costs (most new water heaters are already insulated, so this tip is most effective for electric water heaters that are more than 5 years-old),
Insulate water pipes. Use half-inch foam or pipe tape for insulation wherever pipes are exposed. On cold water pipes, insulate 4 to 5 feet nearest to the water heater. Pipe insulation can save you up to $25 annually.