Hot water is defined as water of a temperature of 110° F (43° C) or hotter. Tempered water ranges from 85° F to 110° F (29° C to 43° C), and the device supplying the tempered water must limit the temperature to 110° F (43° C).
The code does not specify a maximum temperature for hot water; however, it should be limited to a temperature that will minimize burn risk to users and thermal stress to plumbing system components. Most water heaters are shipped with a factory-set temperature of 120°F (49°C). The minimum temperature is established to determine what is considered to be hot water. Water temperature below the minimum temperature is either tempered or cold. Care must be used when installing a system that has a temperature capability of exceeding 120°F (49°C) because of the possibility of a user being scalded.
If a homeowner turns down their water heater temperature, it may help to prevent the chance of scalding; however, turning the water heater below 140°F provides a breeding ground for bacteria like legionella (which causes Legionnaire's disease), E.coli, and pseudomonas, all of which are opportunistic bacteria that can cause serious infection and even death in susceptible populations (including children, elderly, or immune-compromised individuals).
It's a generally good idea to keep the water heater at a higher temperature to kill bacteria and using thermostatic mixing valves at the heater and pressure balancing valves at fixtures to help prevent scalding.
Fortunately, new tub and shower faucets are available which can minimize the chances of getting scalded from hot water.
If the distribution piping distance between the hot water source and any fixture is greater than 100 feet, then the hot water supply system should have a method of maintaining the temperature of the water. Otherwise, water is wasted at the point of use while the user is waiting for the desired temperature to be reached. Pipe insulation is not required on all hot water distribution pipes, but insulation of the hot water distribution pipes on a return circulation system should be installed. www.nachi.org