After space heating, your largest expenditure for energy in your home is what you pay for heating your hot water. This takes up about 20% of your energy bill. Here are some ways to cut this cost:

The U.S. Environmental Agency reports that a household of four can reduce water use by one third just by installing high-efficiency fixtures and appliances (such as dish washers and clothes washers). And heating water with natural gas costs half as much as heating it with electricity. These energy savings will more than pay off the cost of upgrading to higher efficiency fixtures and appliances.

Using cold water instead of hot in your washing machine can save a lot of money, too. Besides, says the EPA, cold water cleans as well as hot and helps clothes last longer.

Also, turn down the temperature setting on your hot water heater. Many are set for 140°F or higher. Each 10-degree

reduction can save you up to 5% on your heating bill. Setting between 115° and 120°F (or halfway between low and medium) probably will be just fine. Besides saving energy, you’ll also reduce the risk of scalding and increase the life of your water heater.

Cover your water heater tank with an insulating blanket unless it’s already insulated to at least R-24 (which is not likely). Use a jacket rated R-8 or two rated R-5, following directions carefully. A jacket can reduce heat loss by 25 to 45% and heating costs by 4 to 9%, paying for itself in less than a year, says the EPA .

Also, insulate your hot water pipes where they’re accessible. And use timers to turn off the heat on electric water heaters when it’s not needed (such as overnight) or when your utility rates are at peak demand levels.