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I got my gas water heater blanket at a garage sale, new in the package for IDK, 50 cents or some such. If aesthetics are not a big concern I'd just wrap it in faced fiberglass batts- heck, they can be much thicker than the store-bought blankets so would probably out-perform them.
A servo would be nice if the scheduled demand for hot water is consistent. I dial mine all the way back to "vacation" as the default setting. Daily I want water hotter than that for the shower so I turn the 'stat up until it clicks (it's very audible) and then turn it right back to "vacation". Due to how 'stats work, if the water is already hot enough it will click off again but if the water is cold enough it will stay on and make a nice batch of hot water. I am not 100% certain but that manually induced on cycle every 24 hours may be the only time in 24 hours the heater fires.
My heater is in the basement and the only thing that would make my system more convenient would be to run a string up into the bathroom (directly above) so I could give it a yank 5-10 minutes before shower time.
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