In the past, the use of external insulation blankets on water heater tanks was widely recommended. Older water heaters had much less internal insulation than current models, and the added insulation helped to reduce "standby losses" and overall water heating costs.

High-efficiency water heaters are built with much higher levels of internal insulation, so an external insulation blanket is much less important. If your water heater is less than ten years old, it probably has enough insulation already built into the tank. If it is older than ten years, it will probably need to be replaced before long. If you do decide to install an external blanket, be careful not to block the air flow to the combustion chamber (usually at the bottom) or the vent at the top.

Hot water pipes should be insulated wherever accessible, particularly in unheated areas. Pre-cut foam insulation sleeves are widely available and easy to install. The foam simply slips onto the pipe through a slit in the sleeve.

Application and Installation

Before purchasing the foam sleeves at your local hardware store, measure the diameter of your pipe. The sleeves come in varying sizes to accommodate the different diameters of pipes. For maximum energy savings, you will want to ensure a snug fit.

Before you insulate water pipes, check for and repair any leaks. Generally speaking, the first fifteen feet of pipe should be insulated, if accessible, because this is where the most energy is lost. It is also a good idea to insulate the first four to six feet of cold pipe where it enters the tank. Heat from the tank can often be conducted back up the cold inlet pipe. If the inlet pipe feels hot or warm to the touch, it should be insulated.

Insulating your hot water pipes will not only reduce your energy bills, but will also allow you to get hot water more quickly when you need it. The hot water in your pipes will be less likely to cool off between uses.