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It is fairly obvious that hot water pipes and hot water storage cylinders should be insulated to prevent heat loss. Newer cylinders already have insulation prefitted...

enery savings by lagging your hot water cylinder
  Cost:  Low
  ROI:  1 Year
  Skill:  DIY-Easy
  Energy Saving:  Medium
  CO2e Saving:  Medium
 How much this measure costs to install: Low : Medium : High
 ROI is the time it takes to return the investment in fuel savings for an average gas heated 3 bed semi-detached house and assumes no government incentive schemes are used: Years
 How easy this is to do: DIY-Easy : DIY-Skilled : Specialist
 How much energy will be saved with this measure: Low : Medium : High
 How much Carbon Dioxide emission will be saved with this measure: Low : Medium : High

...but if your tank is older and un-insulated then according to the Energy Savings Trust by fitting a hot water jacket you will save about £50 per year. Your savings would be even more however if you regularly use an electrical immersion heater, since it costs a lot more to heat water with electricity.

Given that a new thick jacket (75mm) for a hot water tank costs about £15, it should pay for itself in less than six months. Even upgrading an old thinner jacket, is worth considering and will pay back the investment in about 2 years.

This energy/money saving measure is almost a must do. Even if you are renting off a landlord who is too tight fisted to put a jacket on the cylinder, you could buy one and take it with you when you leave!

Insulating hot water pipes will save you less, possibly £10 per year but DIY installation is very easy and materials will only cost about £10. So it will only take a year to payback this investment.

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