Many water heater manufacturers set the thermostat of water heaters at the factory to 140 degrees Fahrenheit. For most households, this is often too high. One rule of thumb: if you can't hold your hand under the tap with the water on it's hottest setting, the water heater is likely turned up too high, and it's wasting energy. Setting the temperature too high also increases the risk of scalding, of particular concern if there are young children or elderly residents in the home.
In most households, the water heater is the most energy intensive appliance, second only to the air conditioner and furnace. Turning the temperature down 20 degrees can save 6 to 10 percent on energy costs. Setting the water heater temperature to 120 Fahrenheit works well in most cases. If you're finding that 120 F is leaving you wishing the water was hotter, gradually adjust the setting upward until a comfortable setting is achieved.
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