12 Ways to Lower Your Electric Bill

Electricity costs are on the rise because of recent increases in the cost of fossil fuels, which run power plants. In 2024, residential electricity cost an average of $0.165 per month per kilowatt-hour (kWh) nationwide. This is up from $0.160 in 2023.^[1]

Even though you can’t control fluctuating energy prices and utility companies, you can adopt different habits to use less energy and lower electricity costs in your home.

Here are 12 different ways to reduce your electricity costs.

Find Affordable Home Insurance

See quotes from top insurers in minutes

Enter your ZIP codeView My Quotes

Secure. Free. Easy-to-use.

Based on 7,669+ reviews

4.8/5

12 ways to lower your electricity costs

Many factors affect your electricity costs, like your local weather and state regulations. While you can’t control many of those external factors, here are the best ways you can lower your electric costs in your home:

1. Complete an energy audit

Potential savings: 5% to 30% annually

An energy audit is when a home energy assessor evaluates your home for energy inefficiencies, shows you your energy use, and gives advice on ways to live with more energy efficiency.^[2]

Many different professionals can perform an energy audit on your home, including contractors, independent firms, and utility companies.

2. Use natural light (daylighting)

Potential savings: 22% annually

A simple way to save on energy costs is to use natural light during the day instead of electricity. The American Council for an Energy-Efficient Economy conducted a study that showed using natural light can save a surprising amount of energy and money both in residential and commercial buildings.^[3]

3. Install a smart thermostat

Potential savings: 8%, or $50 annually

Installing a programmable thermostat enables you to set your home’s climate at a specific temperature on a schedule, so you don’t spend money using energy to heat or cool a house when you’re not home. Energy Star recommends a certified smart thermostat to efficiently heat and cool your home.^[4]

4. Install energy-efficient appliances

Potential savings: $425 annually

Using energy-efficient appliances, especially kitchen appliances, has several benefits. Not only can it save you hundreds of dollars on your energy bills annually, but it can also reduce pollution.^[5]

5. Schedule HVAC maintenance or replacement

Potential savings: $140 annually

Properly maintaining your HVAC system, including changing your air filters regularly, can help you save on energy costs overall. The biggest savings come if you replace an old HVAC unit with an Energy Star-rated unit.

6. Unplug unused devices

Potential savings: $165 annually

Many people don’t realize that many devices still use energy when they’re plugged in, even if they’re off or plugged into a power strip. Unplugging devices like computers, toasters, phone chargers, and other electronics when not in use can lower your electricity bill.^[6]

7. Take advantage of off-peak periods

Potential savings: $100 to $1,000 annually

Many energy companies have off-peak hours. These are the times of day when using electricity is less expensive.

By running your dishwasher or washing machine during off-peak hours, you can save annually. Many electric companies offer calculators that can help you determine how much you’ll save annually just by shifting the time you perform certain tasks.

8. Close blinds and drapes

Potential savings: 10% in heating seasons

Closing your blinds and drapes can help insulate your home, prevent air leaks, and reduce energy costs. How much you save depends on the type of fabric or materials you have for window coverings and the season.^[7]

9. Turn down the hot water temperature

Potential savings: $400 annually

Many hot water heaters are set to heat to 140 degrees, but this isn’t necessary to perform normal household tasks. If you lower your temperature setting to a maximum of 120 degrees, your water will still be sufficiently hot for most tasks. In fact, you can still enjoy hot showers without additional water heating costs.^[8]

10. Use energy-efficient light bulbs

Potential savings: $225 annually

Switching from incandescent bulbs to LED bulbs might have a higher up-front cost but can save you significantly on energy costs annually.^[9]

11. Improve insulation

Potential savings: 15%

Improving your home’s insulation can also help you save on your electric bill. Adding insulation in your attic, over crawl spaces in your floors, and air sealing your home are all things you can do to make your home more energy efficient.^[10]

12. Use smart power strips

Potential savings: $50 to $200 annually

Many household electronics still use power, even if you have them switched off — this is known as a “vampire load.” Smart power strips, also called advanced power strips, have features built in that can reduce the amount of energy your consumer electronics use. Using an advanced power strip instead of a standard power strip could lower your electric bill.

Compare Home Insurance Quotes

Insurify partners with top home insurance companies to generate free quotes

Enter your ZIP codeGet My Quotes

Secure. Free. Easy-to-use.

Based on 7,669+ reviews

4.8/5

Factors that affect electricity costs

Many different factors can affect electricity costs, including the following:^[11]

• Fuel costs: Fuel prices can fluctuate for many reasons, especially during periods of high demand or when transportation or delivery disruptions occur.

• Weather conditions: If an extreme weather event causes supply disruptions, it can affect your electricity costs. Extreme heating and cooling also increase electricity demand.

• Power plant operating costs: Power plants pass on some of their operating costs to their customers, and these prices can fluctuate over time.

• State and federal regulations: Some states regulate electricity prices fully, while others don’t. Depending on where you live, this could affect the amount you see on your monthly electric bill.

How to read your electric bill

Understanding a few key terms can help you more easily interpret the information on your electricity bill.

Here are a few phrases to look for when reviewing your electric bill:

• Consumption charge: This is a charge that shows your specific energy usage. It’s typically represented in kWh. Companies usually charge rates on a specific price per kilowatt-hour you use.

• Delivery charge: This is the cost of delivering electricity to your home. Sometimes this is included on energy bills, and sometimes it isn’t.

• Taxes: Your bill might have applicable state taxes listed.

• Usage comparison: Your bill might show a comparison between the kWh you used this billing cycle versus previous billing cycles.

Electric bill FAQs