How long is the pipe going from your water heater leading to your faucet? You might wonder what difference it makes, and the answer is that you can lose a lot of heat over the length of the pipe. In fact, you could lose as much as 20% of the heat from your hot water just from heat dissipating from the pipe. It could also come from being in close proximity to your cold water pipes. In the colder months, you might also lose a lot of heat if the pipe runs through uninsulated areas of the home.
The best solution to the problem is to install pipe insulation. It is fairly easy to insulate the pipes in your home that are exposed, and thus more prone to heat loss. You can purchase sleeve insulation that is just pushed onto the pipe. This type of insulation can just be cut to length. To make it more efficient, you can use tape to seal up the seams.