Answer: With the type of use pattern you describe, a setback thermostat on your water heater might very well make sense. However, there's a big problem doing this with existing gas-fired storage water heaters. There's no easy way to control them electronically. The ignition system is a standing pilot that burns all the time. The thermostat is mechanical. The safety valve is a solenoid that is held open by a milli-volt thermocouple generating electricity from the heat of the pilot light. To relight the pilot, somebody has to hold in a button on the control valve for about minute after igniting the pilot with a match. Electric water heaters do occasionally come with timers as you suggested. Usually it's advocated by electric utilities that are having trouble meeting peak demand at a certain time of day. What they're doing is shifting the water heating load to a time of day when they have more electricity available. The off-peak water heaters do save a little bit (~2 or 3%) on energy. If you could make an off-peak gas-fired storage water heater, you'd probably get about 3 or 4 times that savings. The standby losses on the gas-fired water heaters are 3 or 4 times higher than the standby losses on electric heaters, because of the central-flue. It's the heat exchanger that transfers heat from the flue gases to the water when the water heater is firing. Unfortunately it also transfers heat back from the water to air in the flue (which is vented to the sky) during standby.