By Jim Donovan

By Jim Donovan

PHILADELPHIA (CBS) — When is the last time you gave any thought to your water heater? Most people just put them in and let them sit there, unless of course they stop working and you’re stuck taking a cold shower.

In this week’s Angie’s List report, Jim Donovan explains why you should probably pay closer attention to your water heater.

You might not realize how much energy your water heater consumes, but it actually represents about 15 percent of your utility bills each month.

“So you want to take special care of it because it actual loses efficiency over the years because sediment builds up inside the water heater, which can actually reduce the capacity and can lead to problems unsuspecting to the homeowner,” said Angie’s List founder, Angie Hicks.

There is one thing you should be doing to help extend the life of your water heater.

“An easy maintenance tip for your water heater to ensure its best efficiency is to drain a quart of water from the water heater once every three months. This will help to reduce sediment from building up in your water heater and make sure they are getting maximum capacity out of your water heater,” said Hicks.

But no matter how well you maintain it, there comes a time when you should consider getting a new one.

“If your water heater is over 10 years old, it’s probably only operating at about 50 percent efficiency. So if that is the case, you probably want to go ahead and consider replacing it,” said Hicks.

Tankless water heaters are a great, energy efficient option. But they are more expensive.

If you want to get a tankless water heater, it’s probably going to be twice as much as a regular water heater or a traditional water heater, but the key here is how much savings you are going to get in your monthly utility bills.

More from Angie:

4 ways to increase water heater efficiency:
Use low-flow faucets and shower heads throughout your home to decrease the amount of water, and energy, used. This will make your tank of hot water go farther.

Check that your water heater tank and pipes are properly insulated. But, don’t cover the tank thermostat.

Lower your water heater base temperature to 120 degrees. Your shower will still be steamy and you will save energy on heating the water.

Drain a quart of water from your water heater tank every three months to remove sediment that slows down heat transfer and lowers the efficiency of your heater. Follow the proper steps suggested by your manufacturer since the type of tank you have can determine the best procedure.

If your water heater is 10 years or older, it is probably only running at 50 percent of its efficiency. The good thing is that there are plenty of options these days from gas, electric and even tankless water heaters. Depending on the company you use, a 40 gallon gas or electric water heater can run anywhere from $700 to $1,300. A tankless water heater is usually twice as much as a traditional one, but can also last twice as long and save you money in the long run.

Angie’s 4 tips for hiring a company to install a water heater:
Stay cool: The need for a water heater replacement generally arises when the hot water stops flowing, making it an emergency situation. Rather than hire the first company you find in the yellow pages, take an hour to call around and compare prices. If you can hold out until normal business hours, you will avoid the after-hours emergency service charge.

Consider the options: Talk to the companies about new innovations and systems that could increase your energy efficiency. Spending a little more on the unit may pay off in monthly energy savings if you plan to be in your home for five or more years.

Don’t over invest: If you plan to sell your home in the near future, don’t spend a lot on a fancy system. A water heater is considered standard when purchasing a home. Like furnaces and roofs, a new water heater may be appealing to potential buyers, but it’s probably not going to increase your asking price.

Understand the process: Replacing a water heater can be cumbersome and involve many gallons of water. Make sure you know how it will be done. The units are very heavy and navigating small staircases can cause damage to your home. Check that your company is insured to cover any damages.

You can reduce your monthly water heating bills by selecting the appropriate water heater for your home. While storage units are the most popular type of water heating systems, tankless systems offer energy savings by providing hot water only when it’s needed.

Why consider a tankless water heater:
Tankless water heaters provide hot water as needed, eliminating the standby energy losses of a conventional tank – which constantly uses fuel to maintain water temperature, even when not needed. They can be used for a whole house or a specific tap.

Tankless water heaters also save space with a compact design. Just be sure the water heater is within roughly 50 feet from a power source and can be mounted on an interior or exterior wall.

Tankless water heaters are better for the environment because a rusty tank doesn’t end up in a landfill.

Tankless water heaters last more than 20 years – about twice the lifespan of storage water heaters.