Yes, lowering the temperature of the water heater does decrease the volume of hot water available at the point of use. Hot water is mixed with cold water to achieve a desired temperature at the point of use. If the water temperature from the heater is lowered, more hot water needs to be mixed with a smaller volume of cold water to achieve the desired temperature.
If you want your hot water to last longer, it may be beneficial to check if you have low-flow shower heads installed to decrease the use of hot water. To do this, simply hold a 1 or 2 gallon bucket under the shower spray, and see how long it takes to fill the bucket. The Environmental Protection Agency (EPA) recommendation is 2 gallons of water per minute. If your shower head delivers more than this, installing a new shower head will be beneficial.
Newer models of low-flow shower heads are capable of delivering a comfortable shower while significantly reducing the amount of hot water used.
