Install a low-flow shower head with a maximum flow rate of 2.5 gallons per minute or less. You'll cut your bathroom water use by 30 to 50 percent, and you'll conserve the energy required to heat the "extra" water.
When you’re choosing a water heater, don’t be tempted to simply buy the lowest-cost model available. Water heating uses too much energy to make the decision lightly. The unit’s initial cost is a small fraction of the money that will be spent operating it over its lifetime.