A.Heating contractor and JLC author Bill Clinton responds: Although most residential water heaters have a maximum setting of 160°F, there are some heaters that are factory-equipped with 180°F thermostats. I have used a number of these, without having the problem you describe.
When the burner on a water heater turns off and there is no circulation happening, hotter water can stratify at the top of the tank, resulting in higher temperatures than the thermostat setting. Perhaps this is the cause of your readings. If you are sure that your temperature reading is accurate, I would turn down the setting a bit and try...
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