Because pipes are surrounded by air – air that is cooler than the water drawn from your water heater – a certain amount of cooling of the water occurs as water travels from the water heater to the faucet. Water moving through external pipes to the water heater is also cooler. Insulating pipes reduces the cooling effect of the air surrounding the pipes. With the minor investment to insulate pipes carrying water to your water heater, you reduce heating required to achieve and maintain the designated water temperature in the tank. This is, obviously, especially true in cold weather. Insulating the pipes that carry hot water from the water heater tank to the faucets will also prevent cooling of the water as it passes through the pipes on its way. Pipe insulation is relatively inexpensive and very easy to install. Insulating pipes when access is easy (such as during a remodel or during construction) is the most efficient time to do this job. In the long run you will save money on your water heating costs.

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