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I looked into them a couple of years ago - the guys at Home Depot and Lowe's all seemed more interested in selling me one rather than giving me the whys and why nots. What I found on my own is that many newer model water heaters will tell you not to use a blanket, especially gas fired models. On the gas fired units you have to be very careful about placing the blanket (not on top or near the flame source) or you can heat the whole house with the resulting fire. If you can find the owner's manual you might want to check there first.
One common sense idea I found was to put your hand on the heater exterior. The warmer it is to the touch to more energy you're losing.
Other good ideas are to turn down the temperature and insulate the pipes that carry hot water from the tank to the faucets.
I opted to not add a blanket (gas fired heater, manual said don't, and neither unit felt all that warm to the touch), but I did drop the temp on one unit and insulated all the pipes.
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"If everything is under control, you are going too slow." - Mario Andretti
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