Correct Temperature Setting
The first step is optimizing energy efficiency for a water heater is setting it to the right temperature. Setting the temperature too high wastes energy. The heater has to maintain the water in the tank at all times and the higher the temperature, the harder it has to work. Also, the water coming out of showers and faucets may be scalding hot and burn people. On top of that, hot water evaporates faster and leaves behind minerals from hard water. This can be problem for hard water at any temperature but it is more problematic for hotter water.
Try adjusting the temperature control down and waiting a day. As long you don’t run out of hot water you can try turning it down a little more. If you start running out of hot water in the middle of shower or during other tasks, turn it back up a little.
Setting the temperature at the lowest position will save the most energy but can have harmful effects. Cooler temperatures and not flushing the sediment can allow dangerous bacteria to grow over extended periods of time.
If you are leaving on vacation, you can set it to the lowest setting (i.e. it is often times marked “Vacation”). The low temperature over a one to two week period will save energy but is not enough time for bacteria to grow.