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ECM: Domestic Water-Heating Systems

W2. Insulate Hot Water Tanks

DescriptionPhoto: Insulate hot water tanks to reduce heat loss.

Although most newer water heaters have adequate insulation built into the tank design, older water heaters lose a significant amount of heat through the tank walls. This heat loss can account for 25 percent of the yearly cost of heating domestic hot water. By insulating the tank with a tank insulation blanket, or tank wrap, these losses can be reduced substantially at low cost. Tank wraps come ready make in a variety of sizes for individual water heaters.


  • Single-family and multifamily buildings with older, uninsulated hot water heater tanks


  • Fiberglass
  • Flexible polyurethane foam


  • Consider installing an insulation blanket to achieve a rating of R-16. If the current water heater insulation is rated R-7, it will be necessary to add a blanket rated R-9 at minimum.
  • All seams should be taped along their entire length.
  • On gas water heaters, care should be taken to avoid blocking airflow to the burner and to keep insulation safely away from the flame.
  • Insulation should not be installed below the drain valve or near the top vent.
  • Insulation should not block access to the valves or thermostats.
  • On old electric water heaters, insulation should not cover the electric service connection box.
  • If the water heater is more than 10 years old, replacement of the water heater should be considered.
  • Most newer models are well insulated and do not need additional insulation layers.
  • Any water heater that is warm to the touch should be insulated.
  • Follow manufacturers instructions carefully.
  • Some utilities sell insulation blankets at a low cost, offer rebates, and install the blankets at little or no cost.


  • Water heater blankets pay for themselves through savings within one year. Water heater blankets can reduce annual operating costs by approximately 5 to 15 percent.


Energy Conservation for Housing – A Workbook, HUD, September 1998. Pages 7-97 through 7-99 address insulating hot water tanks.

Energy Performance Contracting for Public and Indian Housing: A Guide for Participants, HUD, February 1992. Pages 26 and 27 address insulating hot water tanks via performance contracting.

Improving Energy Efficiency in Apartment Buildings, American Council for an Energy-Efficient Economy, 1995. ISBN 0-918249-23-6. Page 109 addresses insulating hot water tanks.

Insulate Your Water Heater Tank for Energy Savings, Part of the U.S. Department of Energy's Consumer's Guide. Discusses considerations for insulating electric and gas water heaters. Step-by-step instructions for installing and insulation blanket are provided.