Why Is My Electric Bill So High? How to Save Money and Energy

Electric bills have steadily increased in recent years. As of 2024, the average residential monthly electric bill was $144, ranging from $89 in Utah to $213 in Hawaii. The average residential electricity rate has been steadily increasing.

If you’ve noticed your electric bill climbing in the last few years, you don’t have to stand by. Here are some of the things you can do to lower your electric bill, from home solar panels to energy efficient appliances, this summer and all year.

What Can Cause a High Electricity Bill?

A higher electric bill could simply be a result of a higher rate from the utility company. It could be from changes in your home or life. Or, it could just be the weather.

Changes in weather

It’s summer in the deep south. You’re using more AC. It’s winter in Minnesota. You need more heat. Your power bill is probably up every year in the same months. 

If it increases, check to see if your bill is up as it normally is compared to a year ago. If it’s abnormally high, it could be warmer or colder than usual for your region. 

Electricity is more expensive

Sometimes electricity just gets more expensive. If the rate from your utility is higher, you might think there’s nothing you can do. Learning more about time-of-use rates, and their peak vs. off-peak hours, may show you how to do some tasks at less expensive times.

Changes in usage 

Changes in routine can increase how much electricity you’re using. If more people are home for more hours of the day, it means more devices, more cooking, more showers, more laundry, and so on. A few cents here and there over and over again could add up. 

Holidays can increase your electricity usage. Here are a few ideas for saving energy during them. 

Leaving devices on

Video game consoles, TVs, and other devices can still use phantom or vampire power for hours at a time when they’re in standby. Unplugging them can add up to a lot of saved energy.

Are you going to unplug everything when you're not using it? No. 

Plugging multiple devices into power strips, then turning off the power strip, can eliminate standby power. Smart plugs and switches can also help. 

Hot water usage

Water heaters are often set to 140 degrees by default, but most people don’t notice a difference when they lower them to 120 degrees. For every 10 degrees you drop the water heater, you can save 3-5% on the energy cost of the water heater. Insulating water pipes and using a water heater insulation blanket usually saves energy and money. 

An electric water heater is another potential energy efficient improvement. Electric water heaters come in conventional, tankless, heat pump, and solar types.

With laundry, you can be more selective about running hot cycles when cold cycles will get the job done. Running full loads and cleaning the lint trap in your dryer as often as recommended can also save you energy.

Old, inefficient appliances

Older appliances around the home might have never been energy efficient, especially by current standards, or could be losing efficiency with age. For an example, a refrigerator from 20 years ago uses 35% more energy than a current Energy-Star certified refrigerator. Your dishwasher or washing machine/dryer may need to run twice to get a load clean or dry.

New electric appliances and EVs

If you toss an old gas stove for a new electric stove, your gas bill will drop and the electric bill will tick up, even if you’re able to save money overall.

If you’ve just bought an electric vehicle for the first time, congrats! One expected trade-off is you’ll use more electricity. Your electric bill might go up, even if your overall cost of owning a vehicle is likely to be lower. Learning how to cost effectively charge your EV and what EV charger is the best fit for you can help reduce your costs.

Poor insulation and a leaky house

The US Department of Energy estimates 9 of 10 homes in the US are under-insulated. With the right level of insulation, homeowners would save about 11% on their total electric bill. Insulation stops air leaks, keeping in heat in the winter and cool in the summer.

You can do your own energy audit, or hire a pro to check what insulation you have and should have in your attic, basement and/or crawl space. Installing the right insulation also protects a home from humidity, pollen, and dust.

How Can I Save on My Energy Bill?

There are ways to save on your energy bill. From quick, easy things to increasing your independence from the utility company and switching to a home solar system.

Energy audit

An energy audit, or home energy assessment, checks a home’s energy efficiency. You can do it yourself, but a professional may give you a more thorough assessment.

An energy audit will include checking for air leaks, inefficient appliances and lightbulbs, insulation levels, and more.

Here are the components of a full energy audit.

• Insulation check: The auditor will examine the insulation levels in the walls, basements, and attics.
• Blower door test: This test measures air leaks and drafts in the home and identifies areas that need to be sealed.
• Thermographic scanning: This scan effectively identifies whether heat is lost through the walls, doors, or windows.
• HVAC system: This involves inspecting the efficiency of the heating and cooling systems, including the ductwork and air delivery systems.
• Lighting evaluation: Checking light fixtures and the types of bulbs to ensure you are using the most energy efficient solutions available.
• Appliances check: Ensuring appliances are working correctly and everything meets energy efficiency standards.
• Utility bill review: The auditor can review your utility bills to identify patterns that indicate unusually high energy usage.

Install a smart thermostat and other smart devices

Smart thermostats, along with smart dishwashers, smart TVs, and smart vacuums, can make your home more efficient. Thermostats can be a saver as they can help you heat and cool your home efficiently. 

Some smart thermostats can learn your heating and cooling preferences in real-time and manage those settings in the most energy-efficient way possible. Others may just be easily adjustable from an app.

Smart plugs and vampire energy

Smart plugs allow you to turn devices on or off with an app, or monitor their electricity usage. Safety, say turning off an iron or the stove, is another positive to smart plugs. 

With smart plugs, it may be simpler to control or program everything to shut down and not use vampire energy when no one’s home or everyone’s asleep. 

Adjust your thermostat and use a ceiling fan

If you have ceiling fans, they can be used for home comfort and HVAC efficiency. Ceiling fans don’t actually change the temperature inside, they simply make it feel cooler or warmer by up to four degrees.

In the cooler months, you can reverse the fan and move warmer air near the ceiling down so it feels warmer where you are. 

However, leaving a fan on when no one is in the room is a waste of energy since no one is there to feel its effects.

Improve your insulation

Adding or installing new insulation can cut your energy bill and improve the comfort and health inside your house. 

This might mean you have to install insulation for the first time or just check insulation levels and add to them. It could be you need to check other parts of the envelope of your house and address leaks there.

Credit US Environmental Protection Agency

Change your HVAC filters

Energy efficiency is only one reason to remember to change the air filters in your HVAC system every 1-3 months. The easier air circulates through vents, ducts, and a whole home, the more efficient an HVAC system runs. 

Filters become dirty as they’re cleaning your home’s air and need to be replaced periodically. The more your system runs, the more frequently you’ll need to change your filters..

A clogged filter makes the whole HVAC system work harder and use more energy. This can eventually lead to more maintenance than expected. 

Energy efficient appliances, devices

When looking at new appliances, look for Energy Star-certified ones and read Energy Guide labels.

Energy Star certification means a product meets efficiency standards set by the US Environmental Protection Agency. Energy Guide, a yellow label on an appliance, gives performance metrics such as estimated annual energy cost.

Water heaters, HVAC systems, heat pumps, EV chargers, dishwashers, washers and dryers, refrigerators and freezers, TVs, and thermostats are some of the appliances with Energy Star lists. Some Energy Star, electrical, and/or smart appliances may qualify for tax credits or rebates.

Changing light bulbs can be an energy-saving step. Energy Star-certified LED bulbs use about 90% less energy than older incandescent bulbs so each bulb can save about $55 in electricity in its lifespan, which is about 15 times longer than a standard bulb. An LED bulb also puts out about 70-90% less heat, so using LED bulbs in more places can make a small difference in how much your AC runs. 

According to the US Environmental Protection Agency, if every home in the US replaced one standard light bulb with an LED, Energy Star bulb, it would prevent seven billion pounds of greenhouse gas emissions a year, the same amount as about 690,000 cars, and it would collectively save about $580 million in power costs.

Switch your retail energy plan

If you live in an area where you can choose your electricity provider, see if switching could save you. Some plans won’t save you money, so be careful to read the fine print.

Palmetto’s retail energy plans, designed for homeowners with solar panels or battery storage, are available in energy choice regions of Texas.

Install solar panels

With solar power for your home, you can reduce the amount of electricity you buy from your utility. You can reduce your electric bills, increase your energy independence, and help the environment. With the expertise of Palmetto’s team, you can maximize the savings from a new system.

If you’re interested in learning more about home solar power and seeing if a journey toward cleaner, less expensive energy is right for you, go to Palmetto’s solar savings calculator or use our contact form.

Adjust your habits

Finding routines that work for you and help you save energy can pay dividends.

It pays to know if you have time-of-use or peak/off-peak rates in your state or area. Then, if you can move some of your energy-heavy jobs to the off-peak periods, you’ll save. Scheduling loads of laundry or the dishwasher or letting a smart thermostat adjust for energy savings may mean you use less power during peak or super-peak hours.

Solar and storage can be a good fit for time-of-use rates. Solar systems generate maximum electricity during mid-days and afternoons. Peak or super-peak rates are most often in the late afternoon and evening, when people tend to get home and use the most electricity. If you have a battery, you can store solar energy and use it instead of the utility company’s peak-rate energy.

Remembering to turn off lights and devices, or putting them on a schedule, may be an easy way to cut back on electricity, too.

To learn more about how you could save with energy improvements around your home, check out Palmetto’s Energy Advisor.

Energy Bill Savings FAQs

How can I easily lower my electricity bill?

Some easy ways to cut your electric bill include checking your home’s insulation, making sure your HVAC filters are clean, shifting when you use power (on a time-of-use rate), lowering the temperature of your water heater, and swapping in new efficient light bulbs. 

Will solar panels eliminate my electricity bill?

No, solar panels often do not fully eliminate your electricity bill. Even when solar takes your electric bill to zero, you’ll receive a bill saying so. Policies vary, so be sure to check with your utility and solar advisor

What are the biggest uses of energy in a house?

A home’s heating and cooling is, by a large margin, the largest user of energy, over half of total energy consumption on average. From there, the list includes  your water heater, lighting, refrigerator/freezer, and washing machine/dryer.