The default setting used by most water heater manufacturers is 120°. Most people find that this temperature is comfortable, reduces the risk of scalding injuries, and still provides plenty of hot water. The lower temperature also slows corrosion and mineral buildup in your water heater tank and pipes. By reducing your water heater thermostat from 140° to 120°, you can save anywhere from 4 to 22 percent in energy costs.
If you have a water heater without specific temperature designations, simply use the medium setting on the thermostat. The temperature dial is normally situated in front of the gas valve on gas water heaters. Electric water heaters may have two thermostats. They are normally located behind the panels on the side of the tank. There are exposed high-voltage wires behind these panels, so you must turn off the electricity to the tank before attempting to remove the panels.