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Here's What Temperature You Should Set Your Water Heater to, to Save Money

You can save hundreds of dollars on your energy bills with this small change.

A hand is twisting the temperature dial of a water heater.
A simple twist of the dial can save you hundreds on your energy bills.
brizmaker/Getty Images

This story is part of Home Tips, CNET's collection of practical advice for getting the most out of your home, inside and out.

Not much beats a hot shower after a long, stressful day. But if you're like me, your enjoyment is always tempered by nagging thoughts about how much that water is actually costing you. That concern isn't for nothing: Hot water heating can account for 14% to 18% of an average utility bill, according to the Department of Energy.

You've probably already noticed that your utility bills have been more costly than usual this year, especially your gas and electric bills. And these are only going to increase more significantly this fall and winter. In fact, families are projected to pay 17.2% more on heating this winter, the highest it's been in more than 10 years, according to the National Energy Assistance Directors' Association (PDF). That means saving money will be a priority. 

If you're looking to save some cash, considering your hot water heater (and hot water consumption) is a good place to start. Here's what to know. For more easy ways to cut costs, simply try turning off the lights and doing laundry the cost-efficient way. You could also consider buying a smart thermostat or other energy-saving smart devices

The perfect temperature to set a hot water heater

If you're looking for a short answer, it's 120 degrees Fahrenheit (about 49 degrees Celsius). Many water heaters are set to 140 degrees F per factory specifications, but lowering the temperature can lead to energy savings of 4% to 22%, and up to $400, according to the Department of Energy. Even with the lower setting, you shouldn't have trouble getting your shower or dishwater hot enough. 

And the default setting of 140 F (60 C) may be going away. Recent installation manuals for major residential water heater manufacturers actually call for a starting temperature of 120 F (49 C).

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The lower temperature might have more to do with avoiding scalding than saving energy. Since 140 F can cause second- and third- degree burns in five seconds, lowering your water heater's temperature can protect you from both financial and physical pain.

Changing your hot water heater's thermostat should be a simple matter of turning a dial or entering a temperature. If you're unsure where your thermostat is located or how to read it, you can consult your owner's manual or talk to a licensed professional.

After adjusting your hot water heater, the Department of Energy recommends running a simple test, since the device's own reading can be inaccurate. Once you've made the change, open the hot water tap furthest from your hot water heater and measure the temperature with a thermometer. If it doesn't match your target temperature, go adjust the thermostat and try again in two hours.

What's the catch?

The Department of Energy lists a few further considerations if you're shifting your water heater temperature. 

Some dishwashers need water between 130 F and 140 F to operate optimally. So watch your dishwasher's performance after you shift the temperature. If your dishes aren't getting as clean, you may need to adjust it back. 

There's also a small risk of water at 120 F growing Legionella bacteria, which causes Legionnaires' Disease. The Department of Energy calls it a small risk, but if you or someone you live with has a weaker immune system, you might want to raise the temperature a few degrees. The concern is generally for larger buildings, a spokesperson for the Centers for Disease Control and Prevention says. Recent guidance from the CDC says that setting your water heater at a higher temperature can kill more germs, but that the risk of scalding, especially for young children and elderly adults, needs to be carefully monitored.

Other ways to save hot water

Besides the thermostat, you should pay attention to your water heater's pipes and tank too. Insulating the tank and pipes can save heat during times you're not using hot water. You can also install low flow faucets and shower heads, which will reduce the amount of hot water you use without impacting your experience. 

If you're unsure about making any of these improvements on your own, check with your utility. Utilities may offer home energy efficiency fixes for free or a discounted price. In some cases, someone from the utility will come and install insulation and new shower heads for free.

In addition to adjustments to your home's hot water infrastructure, you can adjust your habits. Taking shorter showers, washing laundry on a cold setting, showering instead of bathing and using a dishwasher can all save hot water.

Many water heaters have an expected life time of around 10 to 20 years. If you need to replace your water heater, look for an efficient one. You can start with Energy Star, which will help you find energy efficient Energy Star-certified water heaters and provides you with buying guides to decide on brand, energy source and type, like tankless or storage.

You'll have to balance the upfront costs of a water heater with the savings over time, but water heaters, like many appliances, typically have estimated energy costs disclosed before purchase.

The bottom line

An easy way to save money around the house -- sometimes up to hundreds of dollars per year -- is to lower your water heater's temperature and use less hot water. When it comes time to replace your water heater, energy efficient options can help and there are multiple models available to meet your needs.

After you've taken a look at your water heater, move on to your air conditioner, rethink your thermostat placement or consider solar energy.

More ways to save around the home