Calculating the energy your water heater uses to heat the water in its tank can help you save money on electricity. Comparing how much electricity your water heater is using compared to new water heaters can help you calculate how much money you can save by upgrading to a more energy-efficient model.

Read the energy usage label on the water heater. Most water heaters will tell you how many watts it uses, near the electrical connection on it. If your water heater still has an EnergyGuide label, the label will tell you how much kWh (kilowatts per hour) your water heater consumes.

Time for how long you keep your water heater on. Record the time in hours for easier calculation.

Calculate the kWh your water heater uses. Multiply the wattage your water heater consumes by the hours your water heater is on, divided by 1,000 (water heater watts X hours per day / 1,000 = kWh consumed). This equation will give you the kilowatts consumed per hour, which is what the electric company charges you by. (If your water heater has the EnergyGuide label and it shows you the kWh, you do not have to do this equation.)

Multiply the kWh your water heater uses by the rate your electric company charges. The kWh rate your electric company charges is usually shown on your bill. The result will be your cost per day to use your water heater tank.