Determine the number of people that will be living in the house.
Add one to the number of people living in the home.
Multiply the number found in step two by 12. For example, if you had five people in the home, you would add one to get six, and then multiply by 12 to get 72. This is the minimum FHR that your water heater should have, according to the National Appliance Energy Conservation Act.
- You can save more money on your energy bill by setting the heater to 120 degrees, which is warm enough for just about any use, rather than 140 degrees, which is the standard setting for most heaters. The U.S. Department of Energy recommends insulating the first six feet of pipes extending from the water heater to reduce energy usage. You can also insulate the water heater itself, but do not cover the thermostat.