How to Lower Your Electric Bill: 12 Ways That Actually Work

The average American household pays about $170/month for electricity, but that number swings wildly depending on where you live. Residents in Hawaii pay over $300 per month on average, while those in Utah and Idaho pay closer to $90. Regardless of where you live, there are concrete steps you can take to cut your electric bill by 10-30%.

Understand Your Bill First

Before you start, figure out where the money's actually going. In most homes it breaks down like this: heating and cooling eat 40-50%, water heating takes 12-15%, appliances and lighting (15-20%), electronics and entertainment (10-15%), and everything else (5-10%). The single biggest lever for most households is heating and cooling efficiency.

12 Ways to Cut Your Electric Bill

1. Adjust your thermostat. Each degree you raise in summer or lower in winter saves roughly 3% on heating/cooling costs. Setting your thermostat to 68F in winter and 78F in summer (when home) can save $100-200 per year. A programmable or smart thermostat automates this when you're asleep or away.

2. Switch to LED bulbs. They use 75% less energy and last 25 times longer than incandescent. Swap out 20 bulbs and save $100-150/year. Lowest-effort win on this entire list.

3. Kill phantom loads. Your TV, phone charger, gaming console, and coffee maker are drawing power right now, even "off." This "phantom load" or "vampire power" can account for 5-10% of your total electricity use. Use power strips and turn them off, or unplug devices when not in use.

4. Wash clothes in cold water. 90% of the energy your washer uses goes to heating water. Cold works just as well for most loads and saves $60-100/year. Your clothes won't notice.

5. Air dry when possible. Your clothes dryer is one of the most energy-intensive appliances in your home. Air drying even half your loads can save $50-75 per year.

6. Seal air leaks. Gaps around windows, doors, and electrical outlets let conditioned air escape. Weatherstripping and caulking cost $20-50 in materials and can reduce heating and cooling costs by 10-20%.

7. Use ceiling fans. A fan makes a room feel 4-6 degrees cooler, which means you can bump the thermostat up without noticing. In winter, reverse the direction to push warm air down. Fans cost about 1 cent per hour to run, compared to 10-30 cents per hour for AC.

8. Replace old appliances when they die. ENERGY STAR fridges, dishwashers, and washers use 10-50% less energy than whatever came with your house in 2005. If your fridge is more than 15 years old, replacing it could save $100+ per year alone.

9. Use off-peak rates. If your utility offers time-of-use pricing, nights and weekends are cheaper. Running the dishwasher at 10pm instead of 6pm can cut those costs by 20-40%. Check with your utility to see if time-of-use pricing is available.

10. Maintain your HVAC system. Replace air filters every 1-3 months. Dirty filters make your system work harder, increasing energy use by 5-15%. An annual professional tune-up costs $75-150 and keeps your system running at peak efficiency.

11. Insulate your water heater. If your water heater is warm to the touch, it's losing heat. An insulating blanket costs $20-30 and can save $30-50 per year. Also lower your water heater temperature to 120F. Most come set at 140F from the factory.

12. Cook smarter. Use the microwave, toaster oven, or air fryer for small meals. They use 30-80% less energy than firing up the full oven. When using the oven, avoid opening the door repeatedly since the temperature drops 25-50 degrees each time.

How to Read Your Electric Bill

Your bill lists usage in kilowatt-hours (kWh). One kWh = a 1,000-watt appliance running for one hour. The national average residential rate is about $0.17 per kWh in 2026, but your rate may be higher or lower depending on your state and utility. Multiply your rate by your monthly kWh usage to understand your baseline. Then use the Electricity Cost Calculator to see which specific appliances are costing you the most.

For more on this topic, see our subscription audit guide.

Sources

U.S. Energy Information Administration (EIA): Average retail electricity price data
ENERGY STAR: EPA energy efficiency ratings and savings estimates

Related Tools

Calculate appliance costs with the Electricity Cost Calculator. Estimate driving costs with the Fuel Cost Calculator. Set a savings target with the Savings Goal Calculator. See your take-home pay with the Paycheck Calculator.