To increase water heater temperature on a gas unit turn the thermostat dial on the gas valve to a higher setting. Electric heaters require turning off the breaker removing the access panel and adjusting the thermostat with a flathead screwdriver. The recommended setting is 120 degrees Fahrenheit. Higher temperatures increase scalding risk and energy costs. Wait 2 hours after adjusting then test at a faucet with a thermometer to verify the new temperature.