How To Lower Your Electric Bill

Electric bills have become a bigger part of many household budgets. Between rising energy prices, seasonal weather, and older homes where electricity might be wasted, it’s easy to wonder why your bill seems higher than expected.

The good news is that lowering your electric bill doesn’t always require expensive upgrades or dramatic lifestyle changes. Small adjustments to how you use energy, along with a few smart home improvements, can add up to meaningful savings over time.

Why is your electric bill so high?

Several factors can cause your electric bill to increase, even if your habits haven’t changed. Common reasons include¹:

• Heating and cooling systems work harder during extreme weather
• Rising utility rates
• Older appliances use more electricity
• Poor insulation or air leaks
• Leaving electronics running when they aren’t needed
• Seasonal increases in energy use, such as holiday lighting or additional laundry

Sometimes the increase isn’t due to using more electricity. Your utility company may have raised its rates, or your household may be paying higher delivery charges. Reviewing your monthly bill can help you spot patterns. Compare this month’s energy usage, measured in kilowatt-hours (kWh), with previous months to determine whether you’re using more electricity or simply paying more per unit.

9 ways to reduce electricity costs

Once you understand the mechanics, you can take steps to lower your electric bill. Some strategies require small adjustments to your habits, while others may require upfront expenses. Even with an initial outlay, you could still benefit from long-term energy savings.

Prioritize your approach by starting with the easiest ways to reduce electricity costs, while planning to save money to cover greater costs. 

1. Adjust your thermostat settings

Heating and cooling account for a large share of many household energy bills. The U.S. Department of Energy suggests that turning your thermostat back between seven and 10 degrees Fahrenheit from its normal setting for eight hours a day could save up to 10% annually on heating and cooling costs².

Even if you don’t make that drastic a change, you can still benefit. Consider these tips:

• Raise your thermostat a few degrees during the summer and lower it slightly during the winter.
• If you are away during certain hours of the day, adjust the temperature accordingly. If you have a programmable thermostat, set up a schedule that automatically adjusts based on when you’re home.
• Before leaving on vacation, adjust your thermostat by a greater degree. Beware of turning it too low in the winter, however, because you don’t want your pipes to freeze.

You might need to compensate for your new home's temperature by wearing layers in the winter or opening windows during cooler hours in the summer. 

2. Switch to LED light bulbs

If you’re still using incandescent or halogen bulbs, switching to LEDs is one of the simplest ways to reduce electricity costs. LED bulbs use up to 75% less energy than traditional incandescent bulbs while lasting longer and producing less heat³.

Although LEDs typically cost more upfront, they generally pay for themselves through lower energy costs and fewer replacements. If you can’t replace all your bulbs at once, start in the areas you use most often, such as the kitchen, bathroom, and living room.

3. Unplug devices and appliances when not in use

You can reduce electricity costs by unplugging devices and appliances when you aren’t using them. Culprits like TVs, phone chargers, gaming systems, computers, and printers use “phantom” energy that draws electricity even when powered down.

You don’t need to unplug each device individually, though. Connect groups of electronics to advanced “smart” power strips that automatically cut power to the equipment when it’s not in use. Even though each device uses a small amount of electricity, cumulatively, that standby power can add up over time.

4. Use energy-efficient appliances

Older appliances often consume more electricity than newer models. Rather than replacing everything at once, start by replacing failing older major appliances with ENERGY STAR®-labeled models. 

The appliances most likely to have the greatest impact on electricity use include refrigerators, dishwashers, HVAC equipment, washing machines, and water heaters. 

5. Seal air leaks and improve insulation

If air is escaping through gaps around doors, windows, attics, or crawl spaces, your heating and cooling systems have to work harder, leading to greater energy consumption. Simple budget-friendly improvements that could save you up to 11% on cooling and heating costs⁴:

• Adding weatherstripping around your doors to the garage and outside
• Caulking window gaps
• Installing door sweeps
• Adding attic insulation
• Hanging heavier curtains on your windows
• Using heat-sealing plastic on your windows during the winter

Some utility companies offer free or discounted energy audits that identify areas where energy is being wasted. This can help you pinpoint exactly where your biggest leaks are.

6. Take advantage of off-peak electricity rates

Some utility companies charge different rates depending on the time of day. Check with your electricity provider to see if you’re on a time-of-use plan. If you are, your energy usage may cost less during off-peak hours.

Once you know the off-peak hours, you can shift some of your energy-intensive activities, like running the dishwasher or doing laundry, to those hours.

7. Use fans instead of air conditioning when possible

Air conditioning can be expensive during the summer. On milder days, ceiling fans or portable fans may provide enough comfort without relying entirely on your air conditioner.

Fans don’t usually lower the room temperature, but they help you feel cooler by increasing air circulation. If possible, consider setting up fans to circulate air throughout the home while open windows. 

Turn off fans in areas where people aren’t using the space.

8. Negotiate your electricity plan or switch providers

Not everyone has access to a competitive energy market, but if you live in an area where you can choose your electricity supplier, compare rates at least once a year. Switch your electric company to one that charges less if possible.

In some cases, your provider may be able to help you with different plans that make your bill a little more manageable. These programs might include budget billing programs, average payment plans, and energy-saving programs. 

9 Look into assistance programs and rebates

Don’t overlook programs designed to reduce electricity costs. In addition to utility company rate programs, some states offer access to the Low Income Home Energy Assistance Program (LIHEAP)⁵. You must meet income and residency requirements, but if you qualify, you may be able to pay less for electricity.

If you want financial help making home updates, the Weatherization Assistance Program (WAP)⁶ can help you add insulation, repair your heating and cooling systems, and even install devices such as LED lighting. You must qualify for this federal program, which is administered through state agencies. 

Conclusion

Lowering your electric bill usually isn’t about finding one big solution. Instead, it’s about combining several small changes that reduce energy use over time. 

Start with the easiest improvements, like adjusting your thermostat and replacing frequently used light bulbs with LEDs. As your budget allows, larger investments, such as improving insulation or upgrading appliances, can lead to greater savings.