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The temperature is pre-set and is intended to be not too hot to inadvertently burn someone. Increasing the setting can cause a real SAFETY HAZARD, especially if small children or seniors are involved.
With that in mind, there will be a panel that unscrews from the side of the heater. After removing it, lift the insulation back and a dial should be visible. There will be numbers, and a pointer with a screw slot in the centre. Turning the pointer to a higher number will increase the temperature.
If you are going to adjust it, only do so a very small amount at one time, until you reach the desired temperature.
Remember, increasing the temperature will not give you more hot water, it will only give you hotter water. If you need more hot water, consider getting a larger tank or an "on demand" gas fired unit.
A lot depends on the size of the tank. And when it heats some systems only heat at night , this is ok if the system is large , on most heaters there is a thermostat on the side that can be used to set to a higher temp. the thermostat on your heater may be faulty.
remove the two covers one high and one low and set the temp higher. This time of year with colder water comming in the house the water heater has to work harder to raise the temp of the incomming water. In the summer the incommong water is much warmer. 40 gal is a small water heater and you will only get about 15 gal of hot water with the ice cold water entering the water heater as you use the hot water. You can get a bigger water heater. even better is to go tankless and a have never ending hot water and save money at the same time.
I'm not quite sure I understand what you have done but, make sure your compresor(outside is running and, that you don't have the thermostat set to "fan". You want the display to show "cool" and then adjust your temp. It sounds like you have the system set to fan and not cool. Provide me with a model number and I will see about getting you a manual.
1) Pdf manual on amdrol website show a mixing valve that mixes cold water
with the hot water so water temperature going to faucet stays the same: http://www.amtrol.com/pdf/MC10169%20BMconstantempflyer.pdf
You set the temperature of the mixing valve.
You can also set up 2 sets of pipes ... one is connected to mixing valve
that goes to sinks and tubs. The other pipe bypasses mixing valve sends
hotter water to washing machine.
Problem new or old? How long you have unit? Sounds like not enough flow to keep burner on. Tankless need at least .6 gpm to keep hot water flowing or else the burner fires then shuts fires then shuts and you get a sandwich effect...hot cold hot cold. If you have new diverter valve in shower -vs- old two handle type try turning hot water ALL the way ON and see if hot stays hot. If it does stay hot then slowly adjust to cool and see if you maintain a good MIX for proper temp. If it goes cold again try this......LOWER control pad setting to a comfortable 105 degrees (ladies) 100 degrees(men) and turn shower valve all the way to HOT. See if your temp remains consistant now and if it does then problem solved. Tankless mindset...set temp on control pad and stop trying to MIX at shower valve. Thats how these things work. Thats why I install a control pad in each bath and one in the kitchen for adjusting ash temp during dishwasher on time. ditto for wash machine. You should never need to turn on cold water if your unit is set to proper temp at controller. Hope this helps
if it is electric remove the metal plate that is about 1/3 from the top usually colored blue or whitethere is pull dome of the insulation out fof the way you will see red and blue wires going into the element and a plastic cover underneath the cover is a setting with an indicator it is usually adjustable with a thin flat head crew driver the indicator has high medium and low temp setting