10 Ways to Lower Your Electric Bill

Unplugging devices, installing a smart thermostat, and getting an energy audit are a few ways you can lower your electric bill.

Catherine Collins
Catherine Collins

Catherine leverages her background in education and finance to write articles that help readers make informed decisions about their insurance and finances.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated November 28, 2023 | Reading time: 4 minutes

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Electricity costs are on the rise because of recent increases in the cost of fossil fuels, which run power plants. In September 2022, electricity cost an average of $0.167 per kilowatt-hour (kWh) nationwide. One year later, the average cost was closer to $0.171 per kWh.[1]

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

Here are 10 different ways to reduce your electricity costs.

10 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:

  • Complete an energy audit

  • Use natural light (daylighting)

  • Install a smart thermostat

  • Use energy-efficient appliances

  • Schedule HVAC maintenance or replacement

  • Unplug unused devices

  • Take advantage of off-peak periods

  • Close blinds and drapes

  • Turn down the hot water temperature

  • Use energy-efficient light bulbs

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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]

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]

How Much Does a Heat Pump Cost in 2024?

How Much Does a Heat Pump Cost in 2024?

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 consumers hundreds of dollars on their 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.[4]

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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]

Does Home Insurance Cover Electrical Panel Replacement?

Does Home Insurance Cover Electrical Panel Replacement?

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]

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How to read your electric bill

Sometimes, reading your electric bill can be a challenge. By understanding a few key terms, you can more easily interpret the information on your 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

Here are some frequently asked questions about energy usage and its effect on your electric bills.

  • What runs up your electric bill the most?

    Heating and cooling your home increases your electric bill more than anything else, according to the U.S. Energy Information Association.[10]

  • How can you reduce your electric bill in the summer?

    You can reduce your electric bills in many ways during the summer. First, use curtains and blinds to block out light during the day. Next, consider installing a smart thermostat you can easily program to be more efficient when you’re not at home. Using fans is another great way to circulate air and make a room feel cooler without increasing electricity costs.

    Other energy-saving tips, like sealing cracks and turning off appliances regularly, can also help save on costs.[11]

  • What factors affect your electricity costs?

    Several factors can affect electricity costs. Overall economic factors affect electricity costs, such as fuel costs. Weather conditions also affect electricity costs, including how many people need to utilize resources.

    Power plants also pass on some of their operating costs to their customers, and these prices can fluctuate over time. Finally, state and federal regulations can affect utility bills.[12]

  • What are the best energy-efficient appliances?

    To find the best energy-efficient appliances, look for the blue Energy Star label. This is a government-backed label from the U.S. Environmental Protection Agency. Every year, ENERGY STAR lists the most energy-efficient appliances. You can use its website to view the most energy-efficient clothes washers, refrigerators, dishwashers, ceiling fans, windows, and more.

Sources

  1. U.S. Energy Information Administration. "U.S. residential electricity bills increased 5% in 2022, after adjusting for inflation."
  2. U.S. Department of Energy. "Energy Saver 101 Infographic: Home Energy Audits."
  3. American Council for an Energy-Efficient Economy. "Energy Savings from Daylighting: A Controlled Experiment."
  4. Energy Star. "https://www.energystar.gov/saveathome/heating_cooling."
  5. U.S. Department of Energy. "DOE Proposes New Standards for Residential Appliances to Save Americans Billions in Annual Energy and Water Bill."
  6. Natural Resources Defense Council. "Home Idle Load: Devices Wasting Huge Amounts of Electricity When Not in Active Use."
  7. U.S. Department of Energy. "Energy Efficient Window Coverings."
  8. U.S. Department of Energy. "Do-It-Yourself Savings Project: Lower Water Heating Temperature."
  9. U.S. Department of Energy. "Lighting Choices to Save You Money."
  10. U.S. Energy Information Administration (EIA). "Use of electricity."
  11. U.S. Department of Energy. "Spring and Summer Energy-Saving Tips."
  12. U.S. Energy Information Administration. "Electricity explained Factors affecting electricity prices."
Catherine Collins
Catherine Collins

Catherine Collins is a freelance financial writer and author based in Detroit. She's the co-founder of MillennialHomeowner.com and MomsGotMoney.com, and author of the book Mom’s Got Money: A millennial mom’s guide to managing money like a boss. She has written for US News, Huffington Post, Money, Business Insider, Investopedia, Entrepreneur, Go Banking Rates, and many other publications. She currently resides in Detroit, Michigan with her boy-girl twins and a rescue dog named Julep.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

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