Got a water heater that's over seven years old? Here's a solution that could save you money on energy costs: Wrap your water heater in an insulation blanket. It'll save you roughly 1,000 lbs of carbon dioxide a year, and it'll cost you about $20-30 at your hardware store. If you have a newer water heater, it probably doesn't need one as these heaters come insulated. Thinking about doing it? Here's a tutorial that shows you how to install it yourself.