Salvage or Scrap: Water Heater

If the troublesome heater is electric, replace it. Switching to a high-efficiency, Energy Star-certified gas model can cut back on energy consumption by 50 percent. If you have a gas model, think about repairs if it is less than 10 years old and replace it if it's older than 10 years. A gas water heater that's more than 10 years old and seems to be working fine might, in fact, be ready for an upgrade as well. Gas heating systems can last for about 25 years but will operate for years at very low efficiency before they finally fail; if yours is more than 10 years old, it probably operates at less than 50 percent efficiency and deserves to be replaced.

If it is time to shop for a new water heater, consider an Energy Star-certified "demand," or tankless, system, in which water is circulated through a large coil and heated only when needed. You'll never run out of hot water and you'll save, on average, $115 a year on water heating costs. Even better, don't wait for the water heater to fail before planning for a new one. With a little foresight, you might be able to switch to a solar water heater, which can cut water heating costs by $220 a year. Or look into a heat pump, the latest advancement in water heating technology. Sort of like the opposite of refrigeration, a heat pump takes heat from the surrounding air and transfers it into an enclosed tank. These systems also come Energy Star-certified, and can save as much as $290 a year.

Photo credit: The Stone Group