Installing the New 30-Amp Breaker
Open the door to the panel. At the top of the panel is the main breaker; turn it to the "Off" position. Remove the screws that secure the panel cover with a screwdriver. The new breaker needs two spaces in the main breaker bar. Remove the knockouts from the panel cover with pliers.
Test the breakers below the main breaker with a circuit tester to make sure there is no power below it. Be aware, there is still power in the box -- never touch the wires above the main breaker.
Select a knockout in the side of the breaker box and remove it with the pliers. Push a cable clamp into the hole, then turn the nut to secure the clamp to the box. Push enough of the 10-2 NM cable through the hole to reach the position of the new breaker. Tighten the screws on the cable clamp to keep the wire in place.
Strip the outer insulation off the cable from the clamp down with a razor knife. Push the end of the bare -- ground -- wire into an available position on the ground bar and tighten the screw to secure it. Remove 1/2 inch of the inner insulation from the black and white wires with wire strippers. Push the stripped wires under each of the terminal clamps on the 30-amp breaker and tighten the screws. Make sure the breaker's switch is at the "off" position.
Push the breaker onto the terminal fitting on the main breaker bar and ensure it is seated correctly. Replace the panel cover and secure the screws. Turn the main breaker to "On," but leave the new 30-amp breaker off.
Wiring the Hot Water Heater
Test the end of the cable with a circuit tester to be sure the power is off. Secure the wire with wire staples along its route toward the water heater. Ensure the water heater is empty of water and that the water supply is off. Remove the cover from the junction box on top of the water heater and pull the two wires out of the box. Loosen the green -- ground -- screw located in the box with a screwdriver.
Remove the knockout from the junction box cover and install a cable clamp, turn the nut to secure it and then push approximately 4 inches of the 10-2 NM cable through. Tighten the clamp screws to secure the wire.
Strip the outer insulation off the cable from the clamp down. Make a loop at the end of the bare copper -- ground -- wire and wrap it around the green screw. Close the loop around the screw with the pliers, then tighten the screw to secure the ground.
Remove 1/2 inch of the inner insulation from the black and white wires with the wire strippers. Tie the black wire from the water heater to the black wire from the 10-2 NM cable together with the pliers, and then install a wire splice connector over the wires; turn it clockwise to secure the wires together. Repeat this procedure with the white wires. It does not matter which wire you connect to which. This type of circuit does not require a neutral; both will be hot.
Replace the junction box cover and secure the retaining screw. Fill the water heater completely and then turn the new 30-amp circuit breaker to "On." Wait for the water heater to warm the water.