Insulation for water heater
 

I'm pretty sure I know the answer, but does putting insulation around the outside of a water heater have large effect on its efficiency? I would think it would, depending on how much insulation was used. But the blankets that they make for water heaters are expensive and not very thick. What if I just took some R-13 attic insulation and wrapped it around the water heater? Any ideas on how well this would work and if it would be worth it?

well it depends where the tank is located and how often you are using the water but basically yes it will save you money.

I dont know what accounts for being costly for you as i have no real concept of prices for such things in the US but you may want to take a look at this link

Radiant Barrier Water Heater Tank Jacket

How Radiant Barrier works - Energy Efficient Solutions

Any insulation will help but ideally you want something that is going to reflect the heat back in just like a huge thermos. the first thing that springs to mind as a budget option is camping mats with a thermal backing they cost nothing really but if you have even sat or laid on one you will know how good they are for reflecting heat

If you have the room for it, more insulation is better, assuming, of course, that the heat is not escaping into a resistance-heated space, in which case, it would just keep the other thermostat off enough to make up the loss.

The thing about insulation is when does the cost of the insulation outweigh the gains from it? The general savings from those insulated blankets are around 10%. Yes you can add a lot more insulation and get even better savings. But if you either don't have the additional insulation laying around or can't get it for free it is generally not cost effective.
JJ

Now let's assume that I can get insulation either free or relatively inexpensive. What are the potential dangers of wrapping a water heater in unfaced insulation? I would think any since the outside of the water heater doesn't get hotter than an attic would in the summer. All I see is that if I can get insulation to wrap around it's pretty much a win/win situation, mostly because I would be keeping it out of a landfill if I bought it cheap. Any thoughts as to how this wouldn't work, or be dangerous?

If its an electric water heater make sure you dont cover the access plates to the thermostats. Gas water heaters dont cover the top (too close to exhaust) or the air inlets toward the bottom/gas valve area

Water heater jackets are designed to be compact and tidy. If you don't mind the work of re-doing your work for periodic tank replacement and other maintenance, add as much as you want. Arranging for an easy to restore seam in a wrap is probably a good strategy. You might also add a bit of plastic to keep the 'glass dry when the heater leaks.

Do you have a Gas fired water heater, or electric?

Be careful if you have a gas fired heater.

If don't use gas wrap that puppy up! If your a little worried, get a mylar bubble warp to put directly up against the tank, the regular old home Fiberglass over that.

I have an electric water heater, actually everything in my house is electric. I go to an auction once a week and occasionaly there is some insulation, maybe half a batt or a couple of batts that someone over bought and just never got around to returning. Sometimes the insulation is a little older but it would still work fine. Maybe put plastic around the water heater to keep the insulation dry nd then use plastic wrap to keep the insulation on the water heater.