Whenever the water temperature at the point-of-use is too hot, copious quantities of cold water are needed to cool it to a satisfactory temperature. A slight reduction in hot-water temperature ensures it is delivered at the optimum temperature and with the minimum of wasted water. Lowering the tank thermostat setting also reduces the cost of keeping the water heated.
A variation on this practice, called hot-water reset, is practiced by large institutional users. A remote outside thermometer automatically increases the hot-water supply temperature when the weather is warm. This temperature reset can also be done by manually changing the setting at the beginning of the cooling season, then increasing it when the heating season begins.
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Excerpt from Energy Conservation Projects.
