Does a Water Heater Insulation Blanket Save Money?

Insulating your water heater with a blanket is just as effective a way of saving energy and consumption costs, as insulating your roof or walls.

The installation process is easy and costs nothing compared to the output it gives. It improves energy efficiency and saves you a lot of money. It reduces water heater recovery time to save energy.

Where Should You Place It?

If it’s placed in an area, which is close to your living area, it can also insulate your home during winters, also save extra cost and energy getting separate insulation.

Some people have saved up to $200 after getting a water heater insulator installed.

Latest versions of water tanks installed already probably have an installed insulation blanket, but the old tanks might require post installation of the insulation blanket.

Fiber-glass water heater insulation blankets work for both electric and gas water heaters.

The insulation should at least have an R-value of 24. Higher R-value means a thicker blanket and that helps in more insulation capacity. The manufacturer’s label should mention the R-value of the water heater insulation.

Insulating could reduce stand-by heat losses by at least 25%-45%. So, if you are using it for a year, you could save as much as 7%-16% in water heating costs – which is pretty much the cost of the device itself.

There are pre-cut jackets and jackets available for insulation. They cost around $20 or more.

If you need to have a fair idea about your water heater tank’s R-value, touch and feel the outside of the tank with the back of your hand and if it feels warm, it requires insulation.

So, how can you do it? We will take a look at the process and how you could do it right in your home (if you prefer not to buy one).

How do you start?

Check with your product manufacturer if they also offer water heating insulating blankets. They are sometimes available at low costs or on offer rebates. Some even get insulating blankets installed for no cost at all.

If they don’t, you might want to do it yourself.

Make sure the water heater is not leaking. In case of any leak the entire water heater tank needs to be replaced.

If the water heater is an electric one, insulating the bottom of the tank is advisable. It saves another 4%-9% of water heating energy and could also prevent heat loss on to the floor. You may also want to go in for ridged insulation, which allows for better heat absorption.

Things required for insulation:

You will need help for installing the insulator. So, another person with preferably good knowledge on the installation should do the job.

Water heater insulation blanket kit, which usually comes in according to a size of the heater- 30 gallons, 40 gallons and so on.

The kit has a blanket with white vinyl outside and raw insulation on the inside, and sufficient adhesive tapes for the seams.

  • A tape measure
  • A pair of scissors
  • A marker
  • A pair of gloves
  • A dust mask
  • Electrical tape

Instructions for insulation:

Firstly, you need to turn off the water heater. You would also need to switch off the breaker for an electric heater. If you have a gas heater, choose the “Pilot” position.

Now, we will look at the other things to be done, in a step-by-step manner.

Step 1 – Cut the blanket if necessary. Sometimes the insulation blanket is bigger than the water heater’s height.

Step 2 – Do not worry if the blanket is short; it is meant not to be covering the entire bottom anyway. This is to prevent from covering the heating-element access panels. You do not want over heating any panels.

Step 3 –Don’t do anything with the top of the water heater tank unit. Doing anything could block the top of the vent of a gas unit.

Step 4 – Insulation could catch fire from heat being exhausted.

Step 5 – Also, do not cover the anode, the controller, or the pressure and temperature relief valve.

Step 6 – Tape the blanket temporarily in place by wrapping it around the water heater tank.

Step 7 – Place the blanket over the water heater tank so that it does not come with the access panels over the tank’s side, to make your installation process easier.

Some tanks only have one access panel.

Step 8 – Mark the areas, which have controls on them, with a marker. This will help you cut out the bits for access to the controls.

Now, we will be moving onto the next part.

You would find two panels on tank’s side. For an electric water heater unit as well as for a gas water heater unit, you need to cut out an arch shaped hole first.

Then, you need to get it around the burner as well as the gas valve- do ensure you leave a good space while doing so. The opening should be wider than 1 inch around these areas.

Carefully install the insulating blanket, making sure that it is placed perfectly according to the cut out areas and steady. Then permanently tape the blanket secure.

Turn on the water heater – with the maximum temperature at 130 degrees Fahrenheit with an insulating jacket. Having a higher temperature could lead to overheating in the wiring.


Should I get an insulation blanket for my water heater?

You should, if you want to save marginally on electricity cost and energy. If you have an old water heater, it might require insulation installed, but the new ones are already generally equipped with one.

Would an insulation blanket make a difference in the long run?

Yes, it is a smart investment for the long run. It is not only cost effective and energy saving but also helps you from adding more insulation to the house if the water heater unit is placed in an area from where insulation reaches the rooms of the house too.


Save money and above all save energy consumption by installing an effective and inexpensive insulation blanket for your water heater. If you aren’t interested in buying a water heater insulation blanket, try making one yourself!


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