After insulating the cylinder you may wish to increase the efficiency of the enclosure cupboard if the enclosure is used for drying damp items (see below). Insulating the cylinder and pipes leading from it will not necessarily make the cylinder enclosure (hot water cupboard) ineffective for drying purposes.

Some cylinders are specifically designed for external or very cold area installation and will have much more effective insulation properties.

The easiest pipe insulation to fit is a soft-polyurethane tube material which fits over the existing pipe. This material usually comes in short lengths and can be cut to size. This material has a self adhesive tape seam running down the length of the soft tube and provides an excellent heat retaining seal. Pipe insulation without this self sealing seam must be cut down its length before fitting to an existing pipe. If the seam is not sealed after installation then some insulation value may be lost.

Many cylinders use a header pipe system leading to the roof to regulate pressure in the cylinder. If the header pipe is uninsulated then the water in this pipe will cool. Allowing this water to cool creates several energy loss conditions. This cold water is released back into the system when a tap is turned on. For this reason insulation of the entire length of the header pipe is worthwhile. To a lesser extent the cooling water column in the header will act as a heat loss conductor for water remaining in the cylinder. 

Header system tech details: The header system provides simple and low maintenance pressure regulation. The length of the header pipe effectively regulates the pressure of the water remaining in the cylinder. The header pipe usually follows a straight line vertically to the roof. About 10kpa pressure per meter of header pipe is generated in the cylinder. An intake valve (looks like a flying saucer) is used to regulate the maximum pressure entering the cylinder from the cold water system. In fault situations where the intake valve fails or becomes partially blocked by debris excess pressure will exist in the system. In this fault situation - which can be severe or minor - excess pressure (hot water) will be released from the top of the header pipe. This is a common cause of high energy use in hot water systems and can be easily fixed by cleaning or replacing the intake valve. This is a job for a plumber. Other systems use a pressure relief valve (may also look like a flying saucer) with a drain instead of a header pipe. The NZ G12 building standard [September 2010] (figure 5 onwards) has details of possible hot water system configurations.

Insulation of hot water pipes will cause the water in the pipes to remain warm (and even hot) for a very long time. This leads to very significant gains. Significant energy can be lost through cooling between the cylinder and an outlet/tap. This is especially true when hot water pipes pass through uninsulated underfloor areas and basements. If water is warmer when it reaches the outlet then less hot water will be needed to achieve higher temperatures in applications where hot and cold water are mixed. This includes: showers, kitchen sinks, etc.

Most people like to wash their hands in warm or hot water. This is especially true in cold weather. Most users will wait for water flowing from the tap to become warm before beginning to wash. The same is true when using a shower. For this reason insulation of hot water pipes can reduce water resource waste and billing. Users will not need to wait so long for a comfortable temperature.

Insulating the entire length of all hot water pipes is worthwhile. This is true for gas, electric, and solar systems.

Hot water cylinder enclosures are often used for drying damp items and used for dry storage. Many enclosures used for this purpose are not optimised for this purpose at all. Optimisation of enclosure drying properties can be important after fitting cylinder wrap insulation and pipe insulation within the enclosure.

Retaining more heat in the enclosure will increase drying efficiency. A reflective barrier (thin insulated foil) takes up very little space and will be very effective in retaining heat in the enclosure. The reflective barrier can also be fitted over the inside of the enclosure door. Even simple methods to fix the foil in place like drawing pins or push pins can be very effective.

Installing wooden shelves/racks above the cylinder can make drying more effective. Shelves & racks made from finished softwood (like pine) will slowly absorb and dissipate moisture - this will increase drying efficiency.

Insulation of the cylinder and pipes within the enclosure will not prevent heat from the cylinder and pipes reaching the enclosure but it will slow down the rate of transfer. Retaining heat in the drying enclosure becomes more important.