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Heat pump water heaters are most efficient (200-300% efficiency) but expensive ($1,200-$2,500). Tankless gas is second (80-95%) at $1,000-$3,000. Solar is best for sunny climates (50-80% free energy) but requires $5,000-$8,000 investment. Standard tank (50-70%) is cheapest ($400-$900) but least efficient.

Yes! Set to 120°F (49°C). Each 10°F reduction saves 3-5% on water heating costs. Above 140°F risks scalding and scale buildup. Below 120°F increases Legionella bacteria risk. 120°F is sweet spot for safety, comfort, and efficiency. Install low-flow fixtures to maximize savings.

Depends on usage. Pros: 80-95% efficient, unlimited hot water, 20+ year lifespan, space-saving. Cons: high upfront cost ($1,000-$3,000), may need electrical upgrade, limited flow rate. Best for: small households, high energy costs, long-term ownership. Tank heaters better for: large families, low energy costs, budget constraints.

Insulating blanket costs $20-40 and saves 4-9% on water heating bills - about $30-60/year for older tank heaters. Payback under 1 year. Only needed for tanks in unheated spaces (basement, garage) or tanks manufactured before 2004. Modern tanks (post-2004) already have R-16+ insulation. Also insulate first 6 feet of hot water pipes for 2-3% additional savings.

Tank size by household: 1-2 people: 30-40 gallons, 2-3 people: 40-50 gallons, 3-4 people: 50-60 gallons, 5+ people: 60-80 gallons. Tankless sizing: calculate peak demand (gallons per minute) - typically 5-10 GPM for whole house. First-hour rating (FHR) more important than tank size - match FHR to your peak morning hot water usage.