How to save money on electricity bill

How to save money on electricity bill like we have (reduced our bill by 25% – 30%) so that you can spend that money on what you want to. 

Is how to save money on electricity bill high on your list of things to do (or things you NEED to do)?

I hear you. I've been whittling our electricity bill and natural gas bills down ever since we purchased our home 9 years ago, and our energy bill results speak for themselves.

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Decreasing your electric bill can be done using one or more of the following methods:

  • Decreasing your kilowatt hour (kWh) rate that you pay.
  • Changing your energy consumption so that you use less kilowatts.
  • Upgrading tools + appliances to gain energy efficiency.

I've got loads of awesome tips for how to decrease your electricity bill using each of these cost-saving measures.

  1. How Much is the Average Electric Bill?
  2. Understand Your Electricity Plan
  3. Get the Lowest Electricity Rate You Can
  4. How to Lower Electric Bill in Winter
  5. How to Save Money on Electricity Bill in Summer
  6. Ways to Consume Less Electricity
  7. Purchase Energy Efficient Appliances
  8. How Can I Lower My Electric Bill in An Apartment?
  9. How to Cut Electric Bill in Half
  10. How to Reduce Electricity Bill Tricks
  11. Behavior Modification Based off of Evidence: When to Unplug
  12. Get Equipment Upgrades from Your Energy Company

How Much is the Average Electric Bill?

First up, how much is the average electric bill?

I'm not talking about your own personal bill, though that is good information to have as well.

But how much is the average person and household spending on electricity in your part of the country?

Fortunately, the U.S. Energy Information Administration keeps an updated tally of average electric RATE by state. An easier way to figure this out is using this PDF provided by them, which has average monthly bill per state, in the last column. For example, the average electric bill/month for Texas residents is $122.47.

If you want to dig deeper and find out what people in your situation (household size/family size/etc.) are spending, then you'll need to check out The Energy Information Administration (EIA)'s 2009 energy survey statistics.

After you find this information, how does your monthly electric bill compare?

Hint: remember that this is for all residences, which means both small apartments and large homes. Your bill may vary.

Here's how our electric bill has fared over the last several years:

  • 2010: $1,628.86, 10.8₵ per kWh
  • 2011: $1,587.79, 9.1₵ per kWh
  • 2012: $1,384.32, 9.4₵ per kWh
  • 2013: $1,511.79, X.X₵ per kWh (unfortunately I can't find our contracted cost/kWh)
  • 2014: $1,663.86, 10.9₵ per kWh
  • 2015: $1,455.94, 9.9₵ per kWh

Below is a list of the average spent on energy each year by people in our situation:

  • 2-Person Household (next year I'll compare with 3-person households!): $2,040
  • Single-Family Detached Home: $2,307
  • Year of Construction (1970-1979): $1,842
  • 3,000-3,499 Square Feet: $2,635
  • Texas Household: $2,160

Note: We use both electricity and natural gas. The natural gas is for our heat (we don't need much), and for our water heater. Everything else is powered through electricity.

I'm happy to report, that we're definitely below average for electricity bills!

Let me show you how we've accomplished this.

Understand Your Electricity Plan

By taking half an hour or so to understand your electricity plan better, you'll be able to save money on your bill. Why is that? Because you can make some behavior modifications based on things like peak demand charges, and free nights/weekends — both of which are common in plans you'll find today.

  • Find Out if there is a Demand ChargeSome electricity companies charge something called a Demand Charge, which is determined by your highest peak demand of electricity during an on-peak. Check with yours to see if they have this charge. If there is a demand charge, the trick is for you to lower your highest demand rate. During your peak hour usage, make sure to only use one-two appliances at once. For instance, if you would like to run a load of dishes, and a load of laundry, load up the dishwasher, but don’t turn it on until after the load of laundry is complete.
  • Find Out if There are “Free” Electricity Times: Does your plan offer free nights? Free weekends? And what hours do these free periods start/end?
  • Shop Around During the Best Month of the Year: If you are in a deregulated electricity market, then you get to choose your electricity provider + your plan. It can be a little overwhelming; one thing you should know is that the month that you choose your new plan matters. For example, here in Houston, one of the best months to shop for a new electricity plan is February. So, if my plan were to end in November, I would choose a 3-month plan instead of a 12-month plan, opening me up to shop for a new plan three months later, which is the optimal month (February). But if my plan is up in February? Then I would choose a new one, and lock it in for 12 months. In general, you do not want to be shopping for a new energy contract during the month when your bill is typically highest in your part of the country.
  • Utilize Free Offers from Your Energy Company: One of the largest energy companies here in Houston, Reliant Energy, offers all kinds of freebies for their customers including a free CoolSaver A/C Tune Up (something I could have used to determine, among other things, that our filter was way past due replacement), an annual free in-home energy audit, and a free Home Energy Snapshot. Check with your own electricity company to see what they offer for free that could decrease your energy bill, or check out Energy Star’s resource Home Energy Audit.

Get the Lowest Electricity Rate You Can

Start by reducing your per kilowatt price.

Here's a chart that shows the average electricity costs per Kilowatt hour by state (click on the link within the website to get an excel spreadsheet for 2007) to give you an idea of whether or not you are paying too much, or getting a really good deal!

Prices per kilowatt typically go up during the summer months, and down during the winter months. If you are stuck in an electricity contract at too high of a price, you may have to pay your locked-in rate for several more months unless you want to pay a hefty fee to get out of the contract — our termination fee would be $150.

But once you are at the end of your contract, it may be best to do a month-to-month flexible plan until you get to the wintertime and can lock in a lower rate for 12 months.

You may pay more per kilowatt in those few months than you would like, but it will pay off in the end.

How to Lower Electric Bill in Winter

Winter time has some special considerations when trying to decrease your electric bill.

Here are some suggestions for you:

  • Rotate Your Ceiling Fan Clockwise: Doing this during the winter forces warm air that rises to the ceiling, back down into the living areas.
  • Check Windows for Holes in Caulking: While sitting on our couch the other day, something sparkled on our window. I took a closer look and there was literally a pencil eraser-sized peephole in the caulking that allowed me to see to the outside! Needless to say, we caulked it quite quickly. Now might be a good time for you (and us!) to inspect each of our windows and make sure they are not harboring other energy black holes.

How to Save Money on Electricity Bill in Summer

Air conditioning accounts for approximately 12% of your total electricity bill for the whole year. Ouch!

This can be an expensive time of year.

How to save money on electricity bill in summer?

Try these tips out:

    • Turn your Water Heater DownNow that the hot summer months are here, you probably will not notice a drop in your water heater temperature. Most experts suggest turning the water heater down to 120 degrees Fahrenheit. See photo below for where to locate your own temperature gauge on your water heater.
    • Install Solar Screens: Does your home melt in the sun during the day? Any windows where there's direct sunlight shining through, you should install solar screen material (you can, alternatively, get thermal-insulated, black out curtains — pull them closed when you leave for work in the morning).

  • Run the Dishwasher and Washer/Dryer in the Morning or Evening/Night Hours: Because these appliances are large and generate excessive heat, using them during cooler hours will reduce your overall AC/Central air conditioning costs for the summer. Also, check with your electrical company to see if they charge less in the night hours for your electrical consumption because it is off-peak. If so, try to run dishwasher loads and possibly laundry before going to sleep to save some extra money. (FYI: I checked with Reliant Energy, and they do not offer this currently. See “Improved Technology” below).
  • Don't Use the OvenUse your microwave and Crockpot to cook instead of your oven, whenever possible. This uses less energy than the oven anyway, but it will also not add a bunch of heat to your home (causing your A/C to kick on more). You can also grill outside, instead.

Now, let's talk about attacking the cost of that A/C.

A few weeks ago it occurred to me that we had not checked our Central A/C filter for at least a year. Whether it was true or not, it seemed like the unit was churning for extended periods of time (read: extra money leaving our pockets) in order to cool off to our target of 76 degrees Fahrenheit during the day. Sure enough, when Paul climbed our attic ladder and took the filter out it looked as if a family of gremlins was growing on it. The filter cost $37.58 to replace, but I wondered if we would have saved that much and then some had we remembered to replace it at the beginning of the summer instead of when it was winding down?

The nice thing about making these little adjustments and repairs is that they have the potential to save us money while we sleep. Remember, small effort for big, continual rewards. Here are a few things you can do in your own home to decrease your A/C usage moving forward:

  1. Check Ductwork for Holes: We have a relatively new Central A/C and Heating unit for the downstairs of our home. However, before we replaced it in 2011, we discovered lots of holes and gaps in the attic ductwork. In other words, we were paying to cool down our attic with an extremely inefficient machine. Score. Now that the weather is cooling, head up to your attic and check out your own ductwork. Patch any holes or gaps with duct tape (UL 181). If you don’t feel comfortable doing this, you might want to speak with a professional.
  2. Check Windows for Holes in Caulking: While sitting on our couch the other day, something sparkled on our window. I took a closer look and there was literally a pencil eraser-sized peephole in the caulking that allowed me to see to the outside! Needless to say, we caulked it quite quickly. Now might be a good time for you (and us!) to inspect each of our windows and make sure they are not harboring other energy black holes.
  3. Replace Your A/C Filters: Typically, you need to do this every six months to a year. If you have pets? You will likely need to do this more often.
  4. Check Your Attic Insulation: The Department of Energy recommends different levels of insulation depending on where you live. If your home is older, then it might be time to check the condition of your current insulation. Our home was built in 1975, and the value on the insulation used was R-12. Currently the EPA recommends R-38, so we are well behind the times. Once again though, an easy enough solution: blown-in insulation you can do yourself — typically the machine rental is free if you purchase the actual insulation.
  5. Insulate Drop-Down Attic Doors: Do you have drop-down attic doors (like the kind Chevy Chase was hit in the face with on National Lampoon’s Christmas Vacation)? We have two of them, and they are not insulated. A way to gain some efficiency is to add insulation, a foam board, or an attic tent/draft cap.
  6. Make Use of Your Blinds: To maximize the sun in the winter time, you should leave your blinds open during the day, and close them at night.
  7. Install an Adjustable Thermostat: You want a thermostat that will automatically change the temps for nighttime, for the morning right before you wake up, and for when everyone has left the house. We personally use The Nest.

Ways to Consume Less Electricity

You can work on how you consume electricity, so that you use less overall.

Ideas for you:

  • Lower your thermostat to reduce your energy usage. For every degree above 68° F, your heating costs go up approximately three-to-five percent.
  • Set Up a System to Unplug Electronics: Now that school is in full swing and many of us work outside of our homes, why not get into the habit of unplugging electronics when they are not in use? You can set up a power strip for the entertainment center and just unplug or turn it off each night. If you have multiple phones and/or laptops in the house, set up a power station with one source to unplug everything. Add this into your routine when you go to bed: turn off lights, check to make sure doors are locked, and unplug these two power points.
  • Use Cold Water to Wash Laundry: I have been doing this for about a year, and have noticed no difference between clothes washed in cold water versus hot water.
  • Pick One Night/Day a Week to go Off-the Grid: This family chooses to go off-the-grid every Saturday by unplugging all appliances and using candles instead in order to spend more quality time together and also to save money. Could be a fun experiment for you and your family! For us, we've done digital-free Wednesday evenings.

Pssst: next up? Work on how to save money on water bill.

Purchase Energy Efficient Appliances

Another great way to use less electricity is by purchasing energy efficient appliances.

You can do what we've done — instead of going out and spending lots of money on new appliances, as they break, we make sure to replace them with energy efficient ones.

Psst: Not ready to buy new appliances? Help your current appliances run most efficiently by vacuuming them clean (cooling coils in back of refrigerator), and possibly changing or washing their filters (AC).

Here are ideas for you:

    • Switch out your incandescent bulbs for LED or CFL bulbs, which last longer and use less energy. ENERGY STAR® CFLs use approximately 75 percent less energy than traditional incandescent bulbs.
    • Install an Adjustable Thermostat: You want a thermostat that will automatically change the temps for nighttime, for the morning right before you wake up, and for when everyone has left the house. We personally use The Nest.
    • Install a Smart Power Strip: Have you seen the new smart power strips on the market? They're pretty sweet for cutting down on electricity usage when your appliances aren't in use, but are still plugged in. You can hook them up to your smartphone and do all kinds of things with them.

  • Purchase Energy-Star Rated Appliances: Check out this link for products that offer an Energy Star Rating, meaning they will use less energy than their traditional counterparts. As you need to replace older appliances over the years, be sure to buy more energy efficient ones for long term savings in energy costs.

Tip: Before making any energy updates to your home this year, check out the tax incentives to do so. Only certain models of products apply, so make sure you choose one off of the list and wait for sales to maximize your savings. 

How Can I Lower My Electric Bill in An Apartment?

Yes, you can lower your electric bill even if you are in an apartment.

But you do have a few other considerations to make.

I've got an entire article dedicated to how to save money on electric bills in apartments, but I'll leave you with some ideas here:

  • Purchase Tools You Can Take with You to Your Next Home: You don't want to make investments that will stay with the apartment (and you may not be legally allowed to, anyway!). Instead, focus on installing energy-efficient light bulbs, put on a water blanket cover, and purchase a draft guard to put under your door to keep cool air from coming inside.
  • Adjust Your Appliances: You can adjust the temperature on your water heater to be lower, turn off the ice-maker machine in the freezer, and ask your landlord to make sure your A/C filter has been changed. These will all make a difference.
  • Focus on Making Behavioral Changes: You can focus on making behavioral changes now that will follow you into wherever you live, saving your money for years!

How to Cut Electric Bill in Half

How to cut electric bill in half?

Quite honestly, if you want to do this, then you've gotta bring out the big guns.

That means attacking BOTH your electricity rate AND the way you use electricity.

How to Reduce Electricity Bill Tricks

I want to leave you with a few more tricks that help reduce electricity bills: 

  • Dry two or more loads of laundry in a row to take advantage of the heat that builds up during the previous cycle.
  • On sunny days, open the blinds to use the radiant heat of the sun to warm your home. Close them at night to help keep the cold air out.
  • Seal your windows with caulk or weather stripping to reduce air leaks and help maintain the desired temperature in your home year-round.
  • Keep your duct work properly insulated and sealed to prevent air loss. Doing so can reduce heating and cooling costs by 40 percent and also decrease humidity and dust in your home – a win-win-win situation.
  • If you have a fireplace, have your chimney inspected, and keep the chimney damper closed when not in use.
  • Use your microwave and Crockpot to cook instead of your oven, whenever possible.
  • Take Part in an Energy Awareness Month Challenge: I took part in an Energy Awareness Month Contest, and you can bet it was motivation to change my energy usage BIG TIME. Did I win? Nope. But our electric bill was certainly reduced over those several months, meaning I really did win in the long run!

Behavior Modification Based off of Evidence: When to Unplug

The Kill-a-Watt device will help you to pinpoint exactly what is running up your electricity bill, what might not be, and how much passive energy different appliances are eating up when still plugged in (a real treat for frugal people like us!).

This nifty $20-$25 device gives you exact measurements of kilowatt usage from any appliance that can be plugged into a three-prong outlet. Here are some of the readings I measured in my own household to give you an idea of what might be costing you, and where best to put your efforts in reducing your own bill (take the kilowatt hour and multiply it by your price per kilowatt, found on your energy bill). Please note: these costs are for one hour only. In order to figure out monthly consumption, multiply the price by an approximate number of hours your appliance is used each month.

While In Use Price Per Hour (@ $0.14 per kilowatt) While Not in Use, but Plugged In Price Per Hour (@ $0.14 per kilowatt)
TV in Guest Room TV in Guest Room <0.5¢
TV in Living Room TV in Living Room <0.5¢
Floor Lamp 2.4¢ Floor Lamp <0.5¢
Air Conditioner Air Conditioner <0.5¢
Laptop 0.5¢ Laptop <0.5¢
Xbox 1.2¢ Xbox <0.5¢
Wireless Router <0.5¢ Wireless Router <0.5¢
Cell Phone Charger <0.5¢ Cell Phone Charger <0.5¢
Fish Tank (filter/heater/lamp) <0.5¢ Fish Tank (filter/heater/lamp) N/A
Floor Heater 20¢ Floor Heater <0.5¢

Get Equipment Upgrades from Your Energy Company

A few months ago I came home from work to a great surprise: CenterPoint Energy had put a hanger on our front door letting us know that a smart meter would be installed in the next few weeks. Sure enough, four days later we were new smart meter owners!

You may have noticed that since February of 2009, there has been a $3.24 charge on your CenterPoint Energy bill. This is a charge that will remain for 24 months, and then will decrease to $3.05 a month afterwards (with no actual end in sight as of the writing of this article, though I have read that the total cost will be over 12 years and will come to approximately $443 per household) in order to pay for the installation of over 2 million of these new smart meters throughout the Houston, TX area by mid 2012.

The second door hanger that announced our new meter had been installed touted some of the benefits of this new product: remote meter reading, smoother transactions, automatic outage notification, energy efficiency and savings.

How to save money on electricity bills? What if you life in an apartment? How about in the winter, versus the summer time? I love all these electricity saving hacks, tips + tricks for how to decrease your electricity bill by at least 30%! These tips seem totally doable. #savemoney #electricitybills #bills