A water Heater in a basement with water heater insulation attached to the pipes on top

Your water heater continually sucks up too much energy, but it’s not like you can go without hot water. 

After some preliminary research into your options, you’ve discovered that you could insulate your water heater, both the tank itself and the pipes. 

But, will it make a difference if you go through the time and expense to do this? 

If you want more information on water heater insulation, you’ve come to the right place. This guide will further expound on your savings potential, discuss your insulation options, and discuss how much the process will cost. 

Let’s get started!

Does Water Heater Insulation Work?

Water heater insulation is effective since it reduces heat loss by 25-45%. This reduction reflects positively on your energy bills, which could drop by 7-16%. In addition, insulating your water heater is inexpensive and easy to do too!

What Energy Savings Can You Expect with Water Heater Insulation?

Water heaters are a must. You rely on them every day when you use hot water to boil water or wash your hands and when you want to take a hot shower or bath. 

However, your water heater is also imperfect. According to Ohio State University’s Green Home Technology Center, an electric water heater loses up to 1.4 kilowatt-hours of heat from storage tank standby losses.

No wonder the website also found that water heaters contribute up to 18% of utility bills annually.

Insulating your water heater, the tank, and the piping is the answer. 

A homeowner makes adjustments to the foam insulation attached to the pipes atop his water heater tank

Water heater insulation will reduce heat loss, allowing your heater to have more warm water on standby. The unit will work less to produce hot water.

Energy Saver, a US Department of Energy resource, notes that the heat losses from your water tank can decrease by as little as 25% and by as much as 45% through insulation.

The water in the tank also stays warmer longer, just like when you insulate coffee inside a thermos. 

Of course, we know you’re interested in how much you can save on your monthly utility bills if you decide on water heater insulation. According to Energy Saver, the answer is between 7-16%.

As we’ve mentioned elsewhere on the blog, Move.org, a moving resource, states that the average cost for utilities in the US per month is $118.

If you reduce your bill by seven percent, you will shave off $8.26 monthly. If the savings are up to 16%, you will trim $18.88 a month off your bill. At $118 a month, your annual utility costs would be $1,416. 

With a seven percent reduction in your utility bill spending over the year, you could deduct $99.12 for a grand total of $1,316.88.

A year of utility bill savings at a rate of 16% is $226.56 off your annual bill, which adds up to $1,189.44 yearly.

How to Insulate Your Water Heater Tank

As we’ve made clear, you can insulate both the water heater tank and the water heater pipes. So we’ll begin by talking about how to protect the tank itself.

The solution is straightforward—all you need to do is buy a water heater insulation blanket.

These blankets come in various sizes to accommodate different makes and models. You’ll have to find your unit’s specs specifically before purchasing a water heater insulation blanket. Otherwise, it might not fit.

A water heater insulation blanket applied to a water heater in the basement of a home.
Courtesy of HouseLogic

That information is usually available on the tank. You should see a label indicating the amount of water in gallons it can hold. That’s all you need to know to buy a water heater blanket. These blankets are available at home improvement stores as well as online. 

Just as you don’t want a blanket that’s too tight, as it won’t even fit on the tank, you don’t want an overly loose one, either. A loose water heater blanket lets too much air in, rendering the blanket ineffective.

When the time comes to apply the water heater insulation blanket, here’s what you do:

  • Turn off your water heater power supply – water heater tanks can be scalding when the unit is on, and you don’t want to get burned!
  • If yours is a gas water heater, switch the gas valve to the pilot setting for now.
  • Allow a few minutes for the tank to cool.
  • Once the tank has cooled, place the blanket over it
  • If the blanket covers any panels or valves, outline the area with a permanent marker, and then cut away the fabric using fabric scissors.
  • Hold the blanket together using electrical tape.
  • Turn the water heater back on

How Much Does Water Heater Insulation Cost?

The best part about insulating your water heater tank and pipes is that besides being easy enough to do on your own, it’s also inexpensive.

A water heater insulation jacket costs $20-$40. If yours is an oversized heater or a specialty model, you may pay more, but this expense is fairly low-cost.

Fiberglass insulation is priced by square foot and costs between $0.30-$1.50/square foot. However, you only need three feet of insulation for each pipe, so the costs will be low.

Foam pipe sleeves are also incredibly cost-effective. You’d pay less than $5 for all the insulation you’d need.

Considering you can insulate both your water heater tank and the pipes in an afternoon and that you’ll reap a lot of savings without having to spend a ton of money, there’s no reason to skip this project! 

Where to Buy Water Heater Insulation Blankets

Home Depot and Lowes have some great options, some in stock. The links in the previous sentence are affiliate links and help support the blog and more content, if you’d like to use them.

Amazon also has some great options for picking up a water heater insulation blanket. To view the three bestselling blankets currently selling, you can check these out:

Bestseller No. 1
Frost King SP57/11C All Season Water Heater Insulation Blanket, 3” Thick x 48” x 75”, R10
827 Reviews
Frost King SP57/11C All Season Water Heater Insulation Blanket, 3” Thick x 48” x 75”, R10
  • Vinyl backed fiberglass insulation blankets are designed for gas, oil or electric water heaters up to 60 gallon size
  • Improves Heater efficiency
  • 3” Thick x 48” x 75”, R10
  • Package contains a roll of plastic tape
Bestseller No. 2
Water Heater Blanket Insulation, 'NON FIBERGLASS', Fits up to 80 Gallons, Energy Star Certified, Satisfaction Guaranteed
816 Reviews
Water Heater Blanket Insulation, "NON FIBERGLASS", Fits up to 80 Gallons, Energy Star Certified, Satisfaction Guaranteed
  • Save Money, Energy and Help the Environment!!! SAVE 2x MORE WITH OUR PRODUCT!!! 5MM THICKNESS!!!
  • R-VALUE 7.1!!! Reduce Heat Loss by 40% !!! Recover Your Investment in a few month!!!
  • Fits All 20 to 80 Gallon Tanks / Fits Gas or Electric Water Heater
  • Easy to Install and Easy to Clean , Contains no Fiberglass, Non toxic / Non carcinogenic
Bestseller No. 3
Frost King SP60 All Season Water Heater Insulation Blanket, 3” Thick x 60” x 90”, R10, Silver
597 Reviews
Frost King SP60 All Season Water Heater Insulation Blanket, 3” Thick x 60” x 90”, R10, Silver
  • Item Weight: 7.0 lb
  • Country of Origin: United States
  • Brand name: Frost King
  • Item Dimensions: 90.0"L x 3.0"W x 60.0"H

How to Insulate Your Water Heater Pipes

While insulating your hot water heater tank is a good first step, you should also protect the pipes to reap the full extent of utility bill savings.

You have several options for doing this. First, you might opt for fiberglass insulation, which will be durable and warming but expensive.

End view of a roll of fiberglass water heater pipe insulation.
Courtesy of ExpressInsulation.com

Your other option is to buy pipe sleeves, which look like swimming pool noodles. Most pipe sleeves are made of foam. 

You’ll also need scissors, gloves, duct tape or acrylic tape (cable ties work in a pinch), and a tape measure.

Here are the steps to insulate the hot water heater pipes:

Step 1: Measure How Much Insulation You Need

Closeup on a technician's hands holding foam pipe insulation

Before you can begin, you need to plan how much water heater insulation material the project will require. Then, you’ll have to measure the length of the cold water inlet and hot water inlet pipes.

Remember that you don’t have to insulate the entirety of these pipes, only three feet.

Step 2: Buy Your Materials

Your local hardware stores might be the easiest or fastest way to pick up an insulation blanket, unless you want to have it shipped.

Here are some more quick links to check out the pipe insulation available:

At Home Depot
At Lowes

And here at Amazon:

Bestseller No. 1
GonLei 4PACK Winter Faucet Insulation Cover, Hose Cover Socks, Outdoor Faucet Antifreeze Insulated 5.5' W x 7.4' H Long Water Faucet Cover Socks Winter Antifreeze Protection Hose Bib (Black)…
796 Reviews
GonLei 4PACK Winter Faucet Insulation Cover, Hose Cover Socks, Outdoor Faucet Antifreeze Insulated 5.5" W x 7.4" H Long Water Faucet Cover Socks Winter Antifreeze Protection Hose Bib (Black)…
  • Universal size: You will have 4 black faucet protectors 5.5 inches wide,7.4 inches wide and 2 inches thick for all types of faucets. Such as outdoor garden faucets, hose faucets, and the need to keep faucets in cold weather.
  • Frost proof and rain proof material: Heavy waterproof polyester 210D Oxford outer fabric, effective in keeping wind, frost, rain and snow impenetrable. The center is filled with thick gummy cotton, which protects your outdoor faucet from freezing and cracking in sub-zero temperatures.
  • Easy to install: Our external faucet cover, with long enough strong Velcro straps on both sides, can be tightened and folded for storage. When the faucet is placed, be sure to glue the nylon clasp to prevent rainwater from entering.
  • Reuse: These faucet protectors protect against moisture and cold. Protect outdoor faucets from rain, wind, sun, rust and rot. It resists tearing and reuses to provide year-round protection for your faucets.
  • Best protection: Black does not show dirt, easy to clean. Protect your faucets from freezing and breaking while also helping to save expensive repairs, keeping your faucets outside in the winter can be very safe.
Bestseller No. 2
Foam King Brand Insulating Foam Pipe Covers - 1 inch by 3 feet, Pack of 12
290 Reviews
Foam King Brand Insulating Foam Pipe Covers - 1 inch by 3 feet, Pack of 12
  • 1 inch - Prevent heat loss or gain to save energy
  • Use on hot or cold pipes, stop condensation on cold pipes
  • Black Finish
  • Easy to install with pre-cut slits that you can run your finger down to open
Bestseller No. 3
Foam King Pipe Insulation for 1/2 inch copper pipe 3 foot length, Pack of 4
1,031 Reviews
Foam King Pipe Insulation for 1/2 inch copper pipe 3 foot length, Pack of 4
  • Prevent heat loss or gain to save energy - For pipes that are 1/2 inch diameter.
  • Use on hot or cold pipes, stop condensation on cold pipes
  • Fire Retardant, Grey/Black Finish
  • Easy to install with pre-cut slits that you can run your finger down to open
Bestseller No. 4
The Original Colored Pipe Insulation Tape by Pipe Warmers-Indoor/Outdoor Use,Weather Resistant,Water Proof Insulation Tape,Keep Pipes Dry and Warm,Prevent Frozen Pipes.Self-Adhering(2in X 11ft, Beige)
1,354 Reviews
The Original Colored Pipe Insulation Tape by Pipe Warmers-Indoor/Outdoor Use,Weather Resistant,Water Proof Insulation Tape,Keep Pipes Dry and Warm,Prevent Frozen Pipes.Self-Adhering(2in X 11ft, Beige)
  • ADDED R-VALUE – Use the Pipewarmer insultation tape to enhance the R-value and insulate your pipes from natural disasters and pipe bursting. Use in addition to the Pipewarmer bags for optimal R-value of insulation
  • BLENDS INTO LANDSCAPE– Choose from Army Green or Dusty Sand to help camouflage your pipe into the landscape.
  • EASY-TO-APPLY – Simply wrap the pipe with the self-adhering Tape, overlapping itself for extra R-value. The Pipewarmer tape works grade for areas that are hard to cover and/or reach with a Pipewarmer Bag
  • SUPER STICKY - Super sticky adhesive makes for a weather proof adhesion that will not give way. We have TESTED and TESTED to ensure the best quality.
  • INDUSTRIAL GRADE INSULATION – Prevent exterior and interior pipes from freezing in the winter.
Bestseller No. 5
Pipe Insulation Foam Tube - 1' Foam Tubing for AC Unit, Guitar Stands, Exercise Machine Handle and Roof Rack, - 1'(25mm)ID 1-13/32'(43mm)OD - 6Ft
2 Reviews
Pipe Insulation Foam Tube - 1" Foam Tubing for AC Unit, Guitar Stands, Exercise Machine Handle and Roof Rack, - 1"(25mm)ID 1-13/32"(43mm)OD - 6Ft
  • Foam Tubing: 1 Inch(25mm)inner dia, 1-13/32 Inch(43mm) outer dia, 23/64 Inch (9mm) Tube Thickness, 6Ft(1.8m) total length
  • Wide Application: Pipe insulation foam tube is can be used for AC Units, Guitar Stands, Exercise Machine Handle Roof Rack, etc.
  • Premium Material: The tubing is made of EPDM material, fire-resistant, flame-retardant, high-temperature resistant, closed-cell structure, the insulating material does not melt in case of fire, and is not easy to burn; the operating temperature range is -50 to 110 °C
  • Perfect Heat Preservation Insulation: The raw material adopts a high-density airtight structure, low thermal conductivity, stable temperature, and has the function of thermal insulation
  • Quality Commitment: We stand behind the quality of our products. If for any reason you are not satisfied with your purchase, please contact us. We provide a 60-day money-back and 12-month warranty. 100% Satisfaction Guarantee for risk-free shopping!

Step 3: Place the Insulation on the Pipes

Closeup on a technician's hands wrapping a pipe with insulation

If you’re working with fiberglass, we highly recommend wearing gloves, long sleeves, and pants. Fiberglass is very abrasive if it makes direct contact with your skin!

Of course, you can skip the gloves if you’re using a traditional foam pipe sleeve. Well, unless you feel more comfortable wearing them.

You can easily cut the foam down to size, but that’s not so much the case with fiberglass. You’ll have to measure out a three-foot piece precisely.

Step 4: Secure the Pipe Insulation

Using cable wires or tape, secure the insulation every two feet, so it doesn’t shift or fall off.

That’s it!

Conclusion 

Water heater insulation on the tank and piping can retain hot water for longer and reduce heat losses, making the water heater work much harder. The utility bill savings you can enjoy are between 7-16%, which is not too shabby at all!

We hope the information in this guide inspires you to insulate the water heater tank and the pipes. A little effort will go a long way as you enjoy hundreds of dollars saved year after year.

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