Practical Ways To Cut the High Cost of Hot Water

Hot water can quietly drive up energy bills. These practical tips—from free habit changes to smart upgrades—can help lower water-heating costs over time.

TDS Money-Saving Strategist: Andrea Norris-McKnight | posted May 2026

Hot water is one of those household expenses many people don’t think about until energy bills climb.

But heating water can be surprisingly expensive.

In most homes, water heating is one of the larger energy costs after heating and cooling. That means reducing hot water use—or heating it more efficiently—can make a noticeable difference over time.

The good news is you don’t have to jump straight to expensive upgrades.

Some of the best hot water savings come from simple habits and low-cost improvements.

Here are ways to cut the cost of hot water, organized by how much they cost to implement.

Free or Nearly Free Ways To Lower Hot Water Costs

The cheapest savings often come from using less hot water and making your current system work more efficiently.

Lower the Water Heater Temperature

Many water heaters are set to a hotter temperature than necessary.

A setting of 120 degrees is often enough for most households and can reduce energy use while still providing comfortable hot water.

Important: Don’t set your water heater temperature too low. Water that is not hot enough can allow bacteria to grow inside the tank and may not provide adequate hot water for household needs. Many experts recommend 120 degrees as a balance between energy savings, comfort and safety, though households with specific medical or sanitation needs may require different settings. Always follow manufacturer guidance.

Fix Leaks Promptly

A dripping hot water faucet may not seem like much, but those small leaks waste both water and the energy used to heat it.

Monitor:

Faucets
Showerheads
Pipes
Toilets using hot water mixing systems

Small repairs can prevent ongoing waste.

Wash Clothes in Cold Water More Often

A large share of laundry energy use comes from heating water.

Many loads clean perfectly well in cold water, especially:

Everyday clothing
Dark colors
Lightly soiled items

Cold-water washing may also help clothes last longer.

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Run Full Loads Only

Dishwashers and washing machines use water each time they run.

Running full loads helps spread that hot water use across more dishes or clothing.

Avoid:

Half-full dishwasher cycles
Small laundry loads unless necessary

Take Shorter Showers

This may sound obvious, but showers are often among the largest hot-water users in a home.

Even trimming a few minutes from shower time can reduce:

Water use
Water-heating costs
Overall utility bills

You don’t have to rush every shower—just be mindful of how long hot water runs.

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Maintain Your Water Heater

Sediment buildup can make a water heater less efficient over time.

Many manufacturers recommend periodic maintenance, such as flushing part of the tank, to reduce buildup.

Always follow the manufacturer’s instructions or consult a professional if you’re unsure.

Regular maintenance may help:

Improve efficiency
Extend the unit’s life
Reduce heating costs

Low-Cost Improvements That Can Pay Off

Some upgrades require a small investment but may help lower hot water costs over time.

Install a Low-Flow Showerhead

This is often one of the quickest ways to reduce hot water use.

Low-flow showerheads use less water while still providing good pressure.

That means:

Less water to heat
Lower water use
Lower energy costs

If several people shower daily, the savings can add up.

Insulate Hot Water Pipes

Insulating accessible hot water pipes helps keep water warmer as it travels.

This may:

Reduce heat loss
Help hot water reach faucets faster
Reduce how long you run water waiting for it to warm up

Pipe insulation is often inexpensive and relatively simple to install.

Insulate the Water Heater Tank (If Appropriate)

Some older water heaters may benefit from an insulation blanket.

This helps reduce standby heat loss—the heat escaping from the tank while hot water sits unused.

Important: Not all water heaters should be insulated this way. Follow manufacturer recommendations carefully to avoid damaging the unit or creating safety concerns. You may also invalidate any warranty on the unit.

Consider a Water Heater Timer

A water heater keeps water hot even when no one is using it.

For some households, a water heater timer may help reduce standby heating costs by turning the heater off during periods when hot water is rarely needed—such as overnight or when the house is empty.

Timers may work particularly well if your household:

Has predictable schedules
Uses little hot water overnight
Has an electric storage-tank water heater

Reducing the amount of time the heater runs may help lower energy use over time.

Important: Water heater timers are not ideal for every system. They are generally used with certain electric storage-tank water heaters and may not be appropriate for some gas, tankless or heat pump models. Always confirm compatibility with your water heater type and follow manufacturer guidance before installing one. Some households may also find the delayed recovery time inconvenient if hot water is needed unexpectedly.

Higher-Cost Upgrades That May Save Over Time

If your water heater is aging or nearing replacement, larger upgrades may be worth considering.

These options involve more upfront cost but may reduce long-term operating expenses.

Choose an Efficient Replacement Water Heater

When replacing a unit, compare efficiency ratings rather than buying solely based on purchase price.

More efficient models may lower operating costs over the heater’s lifetime.

Consider:

Fuel type
Household size
Estimated operating costs
Energy-efficiency ratings

A cheaper unit upfront may cost more to run later.

Consider a Heat Pump Water Heater

Heat pump water heaters use electricity differently from conventional electric water heaters and can be more energy-efficient in some homes.

They may offer meaningful long-term savings depending on:

Climate
Available installation space
Local energy costs

Research carefully to determine whether this option is a good fit for your home.

Research Solar Water Heating

Solar water heating systems aren’t right for every household, but they may be worth exploring in some situations.

Potential benefits can include:

Reduced energy use
Lower long-term operating costs
Possible local incentives or rebates

Location and home setup play a major role in whether this makes financial sense.

How This Helps Your Budget

Lower hot water costs can help replace:

Higher utility bills
Energy waste
Emergency replacement decisions made under pressure

You’re not just using less hot water—you’re using it more efficiently.

TDS Takeaway: Hot Water Savings Work Best as Habits

Some hot water savings are immediate.

Others work slowly through better habits and smarter equipment choices.

The good news is you don’t need to tackle everything at once.

Start with the no-cost changes, add low-cost improvements when they make sense and keep larger upgrades in mind when replacement time comes.

Over time, those changes can help keep both your household—and your budget—out of hot water.

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About the Author

Andrea Norris-McKnight is the Money-Saving Strategist behind The Dollar Stretcher.

She helps people on tight budgets cut everyday costs, build steadier money habits and create a little breathing room—without guilt, gimmicks, or unrealistic advice.

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