Water heaters
Water heaters are typically the second largest user of energy in the home.
To avoid possible scalding and keep costs lower, water heater thermostats should be set no higher than 120 degrees. If you have a dishwasher that does not pre-heat water for each load the water heater needs to be set between 130 and 150 degrees.
Setting the thermostats
Thermostats for the water heater are located behind panels (on the side) that are accessible by removing screws. First be sure to shut off the electricity to the water heater at the breaker panel. Sometimes you have to get past the insulation to find the thermostat under the access panel. Many water heaters have two thermostats (behind two different access panels) and they both should be set to the same temperature.
For more information on water heaters check these Energy Adviser articles.