When winter temperatures plummet, your water heater often feels the effects. A residential tank-style water heater stores at least 40 gallons of heated water on stand-by at all times. In winter, temperatures where the water heater is installed — often a garage, a basement or even just an under-heated utility room — are lower than normal. This accelerates heat loss from water inside the tank. Higher energy costs and increased wear and tear on the water heater result.