Heating water is the third largest energy expense in your home. It typically accounts for about 13% of your utility bill. There are four ways to cut your water heating bills: use less hot water, turn down the thermostat on your water heater, insulate your water heater, or buy a new, more efficient water heater. Other tips are Install aerating, low-flow faucets & shower heads. Repair leaky faucets promptly. Lower the thermostat on your water heater; a setting of 120°F provides comfortable hot water for most uses. Take more showers than baths. Insulate your electric hot-water storage tank, but be careful not to cover the thermostat. Insulate the first 6 feet of the hot and cold

Source: US Deptartment of Energy EERE
Energy Efficiency and Renewable Energy

water pipes connected to the water heater and all exposed water pipes in crawlspaces, garages or attics. If you are in the market for a new dishwasher or clothes washer, consider buying an efficient, water-saving ENERGY STAR model to reduce hot water use. Doing some research before your water heater fails will enable you to select one that meets your needs when the time comes. Consider natural-gas on-demand or tankless water heaters. Researchers have found savings can be up to 30% compared with a standard natural-gas storage tank water heater.