How to Lower Your Electric Bill

Start with heating and cooling, because it is roughly half your bill and the changes are free. A thermostat setback, a water heater turned down to 120°F, switched power strips on standby loads and cold-water laundry will typically cut a household bill by 15–25% without spending anything. Only after that does hardware make sense.

Where your money actually goes

Almost every effort to cut a bill fails for the same reason: people economize on the visible things — lights, the television — and ignore the invisible ones that dominate the total.

The distribution is the whole strategy. Turning off a light saves a few dollars a year. Adjusting a thermostat saves a few hundred. Spend your attention proportionally.

At a US average of roughly 17 cents per kilowatt-hour and about 10,500 kWh a year, the typical household bill is around $150 a month. A 20% reduction is $360 a year, every year, for changes that cost nothing.

The free wins, in order of return

1. Move the thermostat

Each degree of setback saves roughly 1–3% of heating or cooling cost, and the effect compounds over hours. Setting back 7–10°F for the eight hours you are asleep or out can save around 10% annually.

Recommended settings are 68°F in winter while you are home and awake, lower while asleep or out; 78°F in summer. If those sound uncomfortable, the honest framing is that comfort is what you are buying and the price is legible — each degree costs about 1–3%.

A programmable or smart thermostat does this automatically and removes the discipline problem, which is usually why manual setback fails.

2. Turn the water heater down

Many are shipped or installed at 140°F. The recommended setting is 120°F, which reduces standby losses, slows tank corrosion and eliminates a scalding risk. The saving is typically 4–9% of water heating cost per 10°F reduction.

Do not go below 120°F, as lower temperatures allow bacterial growth in the tank. If you rent and cannot access the heater, this one is not available to you.

3. Kill standby loads

Devices drawing power while switched off account for roughly 5–10% of household electricity — $90–180 a year for a typical home. The main offenders are set-top boxes and cable equipment, game consoles left in instant-on mode, older televisions, printers, and any charger left plugged in with nothing attached.

The fix is a switched power strip for each cluster of devices, and changing game consoles out of instant-on in their settings menu. Not every device should be cut — your router, your fridge and anything with a clock you rely on should stay on.

4. Wash cold, dry outside

Roughly 90% of a washing machine’s energy goes to heating water, so switching to cold cycles removes almost all of it. Modern detergents are formulated for cold water and clean perfectly well.

Dryers are among the largest single loads in a home. Line drying, even part of the time, is one of the largest free savings available. Where a dryer is necessary, cleaning the lint filter every load and the vent duct annually meaningfully improves efficiency — and a blocked vent is a genuine fire risk.

5. Change the furnace or AC filter

A clogged filter forces the system to work harder for the same output. Checking monthly and changing every one to three months is the single most neglected piece of maintenance in most homes, and it also extends the equipment’s life.

6. Use ceiling fans correctly, and only when you are there

A fan cools people, not rooms, by moving air across skin. Running one in an empty room is pure waste. Used properly, a fan lets you raise the thermostat about 4°F for the same comfort. Reverse the direction in winter to push warm air down from the ceiling.

Under $100

• Switched power strips — $15–30 each. Pays back in months.
• Draught excluders and weatherstripping — $20–50. Air leaks around doors and windows are a large share of heating loss, and this is the cheapest way to address them.
• Outlet and switch gaskets — $10. Exterior wall outlets leak more air than people expect.
• A low-flow showerhead — $20–40. Saves both water and the energy that heated it.
• An energy monitor — $25. Discussed below; it tells you where your money actually goes rather than where you assume.
• Remaining LED replacements — $2–5 per bulb. Most homes have done this, but check closets, basements, exterior fixtures and anything on a dimmer.
• A water heater blanket — $30–50, if your tank is older and warm to the touch. Do not cover the top of a gas heater or the thermostat access.

$100 to $500

• A smart thermostat — $100–250. Typically saves 8–15% on heating and cooling, and removes the need to remember. Many utilities offer rebates that cover much of the cost.
• Attic insulation top-up — $300–800 for a DIY job. In an under-insulated home this is one of the highest-return improvements available, and heat loss through the roof is the largest single path in most houses.
• Air sealing the attic hatch and penetrations — $50–150 in materials, and often more effective per dollar than adding insulation on top of leaks.
• Retiring the garage fridge — free, and saves $80–190 a year. An old second fridge in an uncooled space runs at a high duty cycle to keep a few drinks cold. Our refrigerator guide has the arithmetic.
• Heat pump dryer or induction hob, if you are replacing anyway. Never replace working appliances purely for efficiency — the payback almost never justifies it — but when something dies, the efficient option is usually the right call.

When hardware starts to make sense

Once the free and cheap changes are done, larger purchases become worth evaluating — in roughly this order of return:

• Plug-in solar. $400–1,500 for a kit that offsets 5–15% of a bill, with a 4–9 year payback. Available to renters, and it moves with you. See what plug-in solar is.
• Community solar, where available. No hardware, no upfront cost, typically 5–20% off the credited portion of a bill.
• Heat pump water heater. Two to three times more efficient than resistance heating. Meaningful money if you currently heat water electrically.
• Rooftop solar. $15,000–30,000 covering 50–100% of a bill. Note that the federal residential tax credit under Section 25D ended for property placed in service after 31 December 2025, which has lengthened payback considerably — confirm your own position with a tax professional. Our comparison covers the trade-offs.
• A home battery. Worth understanding clearly: batteries rarely pay back on savings alone. Buy one for outage resilience, not as an investment. Our home battery cost guide is blunt about this.

The one phone call most people never make

Ask your utility whether you are on the cheapest available rate plan for your usage pattern. Many households sit on a default tariff simply because nobody ever changed it.

Where a choice exists, the main options are:

• Time-of-use. Cheaper off-peak, more expensive during peak hours, typically late afternoon and evening. Excellent if you can shift laundry, dishwashing and EV charging to overnight; expensive if you cannot.
• Tiered. Rates rise as consumption increases. Efficiency saves you more per unit at the margin.
• Flat. One rate throughout. Simple and often not the cheapest.
• Budget billing. Smooths payments across the year. Does not save money, but makes budgeting easier.

In deregulated markets you may also be able to switch supplier entirely. Compare the actual per-kWh rate including fees rather than the headline number, and check whether an introductory rate expires.

Find your own biggest load

All of the percentages in this article are averages, and your home is not average. For about $25 you can replace every estimate with a measurement.

1. Buy a plug-in energy monitor.
2. Measure each large appliance for 24 hours — fridge, freezer, dryer, television, home office.
3. Note the kWh figure for each and multiply by 365, then by your rate.
4. Check your utility’s online hourly data if available. Your consumption at 3am is your baseline load, and anything above 400–500W at that hour is worth investigating.

People are routinely surprised. Common culprits are an old second fridge, a hot tub, a dehumidifier running continuously in a basement, an aquarium heater, a poorly set pool pump, or an electric water heater cycling more than it should.

Four things that do not work

1. Unplugging phone chargers. A modern charger with nothing attached draws well under a watt. The saving is a few cents a year. Standby loads matter, but they are televisions and consoles, not chargers.
2. Leaving the heating on low all day rather than turning it off. A house loses heat in proportion to the difference between inside and outside, so a cooler house loses less. Setback saves money.
3. “Power saver” plug-in boxes. Devices sold as reducing household consumption by correcting power factor do nothing measurable in a residential setting, because residential meters bill for real power. These are a scam with unusually good marketing.
4. Closing vents in unused rooms, on a forced air system. It raises duct pressure, can reduce total system efficiency and in some cases damages the equipment. Zoning is a design decision, not a vent-closing exercise.

Frequently asked questions