Save Energy with Your Water Heater
For every 10 degrees you reduce your hot water heater’s temperature, CO2 emissions are reduced by about 3-5 percent, or 733 pounds annually.
Setting the thermostat at about 120 degrees, or between low and medium, is a reasonable temperature. And if your hot-water heater is less than 10 years old, you don’t need to buy an insulated blanket for it—the newer units have enough insulation to make the extra layer unnecessary.
Source: Consumers Union’s GreenerChoices.org