• Be sure you're getting the most out of your water heaterbathroom image by Mat Hayward from Fotolia.com
  
  During the winter or even when you're away from home for a while, gas and electric bills can be monstrous, even if you don't use it for heat. The secret expense is in your utility closet: your water heater. Most North American households use storage water heaters which keep a constant supply of hot water in a tank for immediate use. The bad news is that even if you use no hot water, your water heater keeps a large amount of it warm at all times, using up energy and your pocketbook. There are several ways to increase your water heater efficiency and save money without using just cold water.
  
  

Seasonal Changes

• From season to season, your water heater has to work at different speeds. During the cold winter months, your water heater works twice as hard as it does during the summer. This skyrockets your gas or electric bill unnecessarily. During the winter months, turn your water heater down so that it keeps the water in the reserve tank warm but doesn't have to work as hard. Unless you live in Alaska, you can nearly turn your water heater off because water stored in it stays warm by itself.
  
  

Insulation

• An easy fix to conserving the hot water in your storage tank is to insulate your water heater so that the water doesn't have to constantly be warming. Use heat-resistant insulation to avoid fires. Your local home and garden store sells water heater insulator jackets at fairly low costs. Insulated water heaters save 5 to 10 percent on annual costs versus uninsulated heaters, according to the American Council for an Energy-Efficient Economy.
  
  

Conservation

• An easy way to cut back on hot water costs is to conserve hot water use. The less hot water you use, the less your water heater will have to work. Install efficient faucets and shower heads to eliminate wasted hot water. When doing things that usually require hot water, try using cold water every other time.
  
  

Alternatives

• If you're still not happy with the cost of your water heater or its inefficiency, there are alternative systems that are more efficient and cost-effective in the long run. Tankless, on-demand heating systems are perfect for small homes or apartments where the hot water use is centralized. This prevents loss from standby hot water and gives you the hot water you want when you actually need it. These are gas systems and have limitations on gallons of hot water per minute, but are worth it if you have the proper type of home and hot water usage.
  
  You can also install a solar-powered water heater which uses sunlight collected in a solar panel to warm up water in a storage tank, much like traditional gas or electric water heaters.