The standard test for stand-by losses of water heaters does not consider the heat losses through the inlet and outlet tubing. Even under the no flow conditions the tubing will act as fins transferring stored thermal energy to the ambient. The heat transfer from horizontal tubing will be different from that in vertical tubing. The corresponding losses are analyzed and compared with measurements. The merits of insulating the outlet tubing are then considered. Three configurations are studied for the outlet tubing: horizontal, vertical and a combination of both.The work presented is part of an overall study to determine the overall (service) efficiency of residential electric water heaters. The stand-by losses in the tank and the overall distribution and tank losses upon demand will be treated elsewhere.