Each 10 degree reduction in your water heater’s thermostat setting will save you 3-5% of your water heating costs (source: American Council for an Energy-Efficient Economy). For a standard tank type gas water heater, that’s on the order of 10 therms, or roughly $10, per year. You should set the temperature at the lowest setting that keeps everyone happy (particularly the hottest showerer in the house). The analog knob for setting the temperature can be found towards the bottom of the tank. A little trial-and-error may be necessary – set the temperature down some and then wait a day to assess the hot water’s warmth; then adjust some more, if you’re still mixing a lot of cold into showers.
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