Why Is My Energy Bill So High?

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. A decade earlier in 2014, the average bill was about $114. The average residential electricity rate has been steadily increasing.

If you’ve noticed your electric bill climbing in the last few years, 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?

There are many causes of a higher energy bill.

Changes in weather

Since so much of a home’s energy bill is tied to heating and cooling (52%, according to the Energy Information Administration), energy bills typically are highest in the summer and winter.

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 across the board. Sometimes it fluctuates with the time of day.

If you’re on a time-of-use rate, you may be able to shift electricity use away from peak hours, when electricity is more expensive, to off-peak times.

Average rates have increased across the United States, but not evenly, as data from the US Energy Information Administration shows.

Changes in usage 

If more people are home for more hours of the day, it means more devices, more cooking, more showers, and so on. A few extra kilowatt-hours here and there 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 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. 

Power strips, smart plugs, and smart switches can also help cut down on vampire energy.

Hot water usage

Water heating accounts for another 18% of average home energy use, according to the US EIA. They’re often set to 140 degrees by default, but can be lowered to 120 degrees without affecting performance. 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 example, a refrigerator from 20 years ago uses 35% more energy than a current Energy-Star certified refrigerator.

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 goes down. Learning how to cost effectively charge your EV and what EV charger is the best fit for you can 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?

Here's what you can do, from the small to installing home solar panels.

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 air sealing.
• 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 lightbulbs 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.

Smart thermostats 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 learn your habits to help you heat and cool your home efficiently and comfortably. They can also be controlled remotely or scheduled.

Smart plugs

Smart plugs allow you to turn devices on or off with an app, or monitor their electricity usage.

Scheduling smart plugs to turn off when some devices would just be sitting in standby can cut down on vampire energy.

Adjust your thermostat and use a ceiling fan

Use ceiling fans to feel cooler or warmer. 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. But, leaving a fan on when no one is in the room to feel its effects is a waste of energy.

Adjusting your thermostat so your heat pump or air conditioner doesn’t work as hard can save energy, too.

Improve your insulation

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

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. 

A clogged filter makes the whole HVAC system work harder and use more energy. This can eventually lead to more maintenance than expected. The easier air circulates through vents, ducts, and a whole home, the more efficient an HVAC system runs.

The more your system runs, the more frequently you’ll need to change your filters.

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.

Change your lightbulbs

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 EPA, if every home in the US replaced one standard light bulb with an LED, Energy Star bulb, 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 buy less electricity 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.

Adjust your habits

Shifting energy use to off-peak hours can save you money if you have a time-of-use rate from your utility. Appliances that you can schedule make it easy.

Battery storage can be a good fit for time-of-use rate. 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 is 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.