How to Lower Your Electric Bill

Stop overpaying for electricity. These 15 proven strategies can save you $200-500+ per year on your electric bill—from quick no-cost fixes to changes that pay for themselves in months.

$500+
Potential Annual Savings
15
Proven Strategies
10-25%
Bill Reduction
5
No-Cost Tips
#1

The Fastest Way: Switch Your Electricity Provider

If you live in a deregulated state (Texas, Ohio, Pennsylvania, Massachusetts), switching providers is often the single biggest way to save. Many households pay 20-40% more than necessary simply because they've never compared rates.

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Average savings: $200-500/year

by switching to a competitive fixed-rate plan

No-Cost Ways to Lower Your Bill Today

These changes cost nothing but can reduce your bill by 5-15% immediately. Start here before investing in upgrades.

1

Adjust Your Thermostat

Set it to 68°F in winter, 78°F in summer. Every degree you adjust saves 1-3% on heating/cooling costs. When you're away or sleeping, adjust by 7-10°F for even bigger savings.

Saves: $100-200/year Effort: Easy
2

Turn Off Lights & Unplug Devices

Lights left on in empty rooms and "vampire" devices that draw power while off can add $100+/year to your bill. Unplug chargers, use power strips with switches, and make it a habit to turn off lights.

Saves: $50-100/year Effort: Easy
3

Use Fans Strategically

Ceiling fans make rooms feel 4-6°F cooler, letting you raise your thermostat. They cost only 1¢/hour to run vs. 36¢/hour for AC. But remember: fans cool people, not rooms—turn them off when you leave.

Saves: $50-150/year Effort: Easy
4

Run Appliances During Off-Peak Hours

If you're on a time-of-use rate plan, electricity is cheaper at night (typically 9 PM - 7 AM). Run your dishwasher, washer, and dryer during off-peak hours to save 20-50% on those appliances.

Saves: $10-30/month Effort: Easy
5

Close Blinds & Curtains

Windows account for 25-30% of heating and cooling energy loss. In summer, close blinds on south and west-facing windows to block heat. In winter, open them during the day to let solar heat in, then close at night.

Saves: $50-100/year Effort: Easy

Low-Cost Investments That Pay Back Quickly

These upgrades cost $20-200 but typically pay for themselves within 3-12 months through lower bills.

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LED Light Bulbs

LEDs use 75% less energy than incandescent bulbs and last 25x longer. Replace your 20 most-used bulbs first.

Cost: $40-80 Saves: $150/year
Payback: 3-6 months
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Smart Thermostat

Learns your schedule and adjusts automatically. Some utilities offer rebates that cover half the cost.

Cost: $100-250 Saves: $150-200/year
Payback: 6-12 months
🔌

Smart Power Strips

Automatically cut power to devices when not in use. Great for entertainment centers and home offices.

Cost: $25-50 Saves: $100/year
Payback: 3-6 months
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Low-Flow Showerhead

Reduces hot water usage by 25-60% without sacrificing pressure. If you have an electric water heater, savings are significant.

Cost: $20-50 Saves: $75-150/year
Payback: 2-4 months
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HVAC Air Filters

A dirty filter makes your AC work harder. Change filters every 1-3 months. Consider buying in bulk.

Cost: $5-15/filter Saves: 5-15% on cooling
Payback: Immediate
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Water Heater Insulation

A water heater blanket reduces standby heat loss by 25-45%. Most effective for older units or those in unheated spaces.

Cost: $20-40 Saves: $30-60/year
Payback: 4-12 months

Bigger Investments With Bigger Payoffs

These upgrades cost more upfront but can reduce your bill by 20-50% and often qualify for rebates or tax credits.

❄️

High-Efficiency HVAC System

If your AC or furnace is 10+ years old, upgrading to a high-efficiency unit (16+ SEER for AC, 95%+ AFUE for furnace) can reduce heating and cooling costs by 20-40%. Heat pumps are especially efficient in moderate climates.

Cost
$5,000-15,000
Annual Savings
$300-600
Payback
8-15 years

Tax credit: Up to $2,000 for heat pumps under the Inflation Reduction Act

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Attic Insulation

Most homes are under-insulated. Adding insulation to R-38 or higher in your attic prevents heated/cooled air from escaping and reduces HVAC workload by 20-30%.

Cost
$1,500-3,000
Annual Savings
$200-400
Payback
4-8 years

Tax credit: 30% of cost up to $1,200 under IRA

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Energy-Efficient Windows

Double or triple-pane windows with low-E coating reduce heat transfer by 25-50%. Prioritize replacing single-pane windows or those with broken seals.

Cost
$300-1,000/window
Annual Savings
$100-400
Payback
10-20 years

Tax credit: 30% of cost up to $600 under IRA

☀️

Solar Panels

Solar can eliminate 50-100% of your electric bill. Best for homeowners who plan to stay 10+ years and have good sun exposure. Costs have dropped 70% since 2010.

Cost
$15,000-25,000
Annual Savings
$1,000-2,500
Payback
6-10 years

Tax credit: 30% federal tax credit through 2032

Hidden Energy Vampires in Your Home

These devices drain power even when "off." The average home has 20-40 devices in standby mode, costing $100-200/year in wasted electricity.

Device Standby Power Annual Cost Solution
Cable/Satellite Box 15-30W $20-40 Enable power save mode
Game Console 10-25W $15-35 Power strip switch
Desktop Computer 5-20W $10-25 Sleep mode, unplug
TV (modern) 1-5W $2-8 Power strip switch
Phone Charger (no phone) 0.5-2W $1-3 Unplug when not charging
Microwave (display) 2-4W $3-6 Usually fine to leave
Coffee Maker (with clock) 1-2W $2-4 Unplug after use

Pro Tip: Use a Kill-A-Watt Meter

A Kill-A-Watt meter ($20-30) plugs into any outlet and measures exactly how much power a device uses. Use it to identify your biggest energy wasters and calculate true costs. Many libraries lend them for free.

Seasonal Energy-Saving Tips

☀️ Summer Savings

  • Set AC to 78°F when home, 85°F when away
  • Use ceiling fans and raise thermostat 4°F
  • Close blinds on south/west windows during day
  • Grill outside instead of using oven
  • Run dishwasher/laundry at night
  • Change AC filter monthly

❄️ Winter Savings

  • Set heat to 68°F when home, 60°F at night
  • Reverse ceiling fans to push warm air down
  • Open south-facing blinds during day
  • Use oven for cooking (free heat!)
  • Seal drafts around doors and windows
  • Lower water heater to 120°F

Frequently Asked Questions

What uses the most electricity in a home?

Heating and cooling account for 40-50% of most electric bills, followed by water heating (14-18%), appliances like refrigerators and dryers (13-15%), and lighting (9-12%). In hot climates, air conditioning alone can be 50-70% of your summer bill. Targeting these big energy users yields the biggest savings.

Can switching electricity providers really save money?

Yes, in deregulated states (Texas, Ohio, Pennsylvania, Massachusetts, and others), switching providers can save $200-500+ per year. The key is comparing actual rates, not promotional teaser rates. Fixed-rate plans protect you from price spikes, while variable rates may be cheaper short-term but carry risk.

What's the best thermostat setting to save electricity?

Set your thermostat to 68°F in winter and 78°F in summer when home. Each degree adjustment saves 1-3% on heating/cooling costs. Use a programmable thermostat to automatically adjust when you're asleep or away. Smart thermostats can learn your schedule and save an additional 10-15%.

Do LED bulbs really save money?

Yes, LED bulbs use 75% less energy than incandescent bulbs and last 25 times longer. Replacing 20 incandescent bulbs with LEDs saves about $150/year. While LEDs cost more upfront ($2-8 each), they pay for themselves within 3-6 months through lower bills.

Is it cheaper to run appliances at night?

If you're on a time-of-use (TOU) rate plan, yes. Electricity can be 20-50% cheaper during off-peak hours (typically 9 PM - 7 AM). Running your dishwasher, washer, and dryer at night can save $10-30/month. Check if your utility or provider offers TOU rates.

Start With the Biggest Savings First

In deregulated states, switching to a competitive electricity rate is often the fastest way to save $200-500/year. Compare real-time rates from top providers in your area.

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Available in Texas, Ohio, Pennsylvania, Massachusetts and more

How We Ensure Accuracy

Since 2009, the team at ElectricRates.org has helped over 5 million energy consumers find better electricity rates. Supplier information comes from state regulators, company filings, and documented customer feedback. Read the editorial standards & see our methodology.