I would just use foam myself but the plywood would keep legs from digging in from the top if it had legs. seamed to be a lot of energy about that <Grin>
Even with the new heaters there is significant heat loss from the bottom of the heater to the cold dense concrete floor below.
Insulfoam makes the high-density "Insulpad Electric Water Heater Insulation" pad (7-32813-10043-0) $11.87 at Home Depot.
I'd prefer to put in under the drip pan and get a little height for drainage, but I've never seen it installed that way.
(It makes a poor frisbie)
Got a link? I searched for this at homedepot.com and came up empty.
I guess it didn't come up because it's only available in stores. 2" seems a little thin - I'd like to see about 12", but of course you could stack them.
2" is plenty. It's closed cell foam. I don't know if you ever sat on a small wafer of closed cell foam on snow before, but it colds the cold very well. When I sleep on snow, having just a thin pad to sleep on works wonders.
I have seen drain pans installed over the 2" foam before. It's a good way to install them.