Reduce your water heating bill by 10 percent by lowering the water heater temperature from 140�F to 120F�. (Keep the temperature at 140�F if you use an older dishwasher without a temperature booster.)
Once a year, drain a bucket of water from the bottom of the water heater tank. This gets rid of sediment, which can waste energy by "blocking" the water in the tank from the heating element.
Locate water heaters as close to the points of hot water usage as possible. The longer the supply pipe, the more heat is lost.
Insulate your hot water supply pipes to reduce heat loss. (Hardware stores sell pipe insulation kits.)
For older water heaters, consider buying a water heater insulation kit, which reduces the amount of heat lost through the walls of the tank.