The fastest ways to lower your electricity bill

The biggest electricity drains in most homes are heating and cooling, water heating, and old appliances running constantly. Turning off lights, unplugging devices, and adjusting your thermostat will help, but they save far less than replacing an old refrigerator or air conditioner, or insulating your attic. Start by finding what uses the most power in your house — either by looking at your utility bill's breakdown or by using a power meter (a small device you plug into an outlet to measure what one appliance draws). Then tackle the largest users first.

The second-fastest approach is to shift when you use power. If your utility charges different rates at different times of day, running the dishwasher or laundry at night or early morning instead of evening can cut that bill noticeably. Some utilities offer this pricing; check your bill or call your provider to ask. Even without time-based rates, running major appliances during cooler parts of the day means your air conditioner works less hard.

Key Takeaways

  • Heating, cooling, and water heating account for roughly 60 percent of home electricity use, so improvements to those systems save more than turning off lights.
  • A power meter costs $15 to $30 and shows you exactly which appliances use the most electricity, so you know where to focus.
  • Replacing a refrigerator, air conditioner, or water heater with an ENERGY STAR model typically cuts that appliance's power use by 10 to 50 percent.
  • If your utility offers time-of-use rates, running dishwashers and laundry during off-peak hours can lower your bill without changing how much you use.
  • Sealing air leaks and adding insulation to your attic or basement costs $500 to $2,000 upfront but reduces heating and cooling needs year-round.

Understand what uses electricity in your home

Most homes use electricity in this rough order: air conditioning and heating (40 to 50 percent), water heating (15 to 20 percent), appliances like refrigerators and washers (10 to 15 percent), lighting (5 to 10 percent), and everything else including televisions and phone chargers (5 to 10 percent). Your home may differ — a house with electric heating uses far more for that than one with gas, and a home in a hot climate spends more on cooling.

Your utility bill usually shows a breakdown by category, or you can request one. If it does not, a power meter plugged into individual outlets will show you what each device draws. Plug it into your refrigerator for a week, then your air conditioner, then your water heater, and you will see which ones are worth your time to change. Devices that run all day or all night — like refrigerators, freezers, and always-on water heaters — use far more total power than things you use for an hour a day, even if they draw more power while running.

Lower heating and cooling costs

Adjusting your thermostat by 7 to 10 degrees for eight hours a day (like while you sleep or work) saves about 10 percent on heating and cooling costs. A programmable or smart thermostat does this automatically and costs $100 to $300 installed; a basic programmable model from a hardware store costs $30 to $50 and you can install it yourself if you follow the instructions carefully. Turning the thermostat down in winter or up in summer by just a few degrees all day saves less per degree but still adds up over months.

Sealing air leaks around windows, doors, and where pipes enter the house stops conditioned air from escaping. Weatherstripping costs $10 to $50 per door or window and takes an hour to install. Caulking around frames costs $5 to $20 per window. If your attic or basement is uninsulated or poorly insulated, adding insulation there stops heat from rising out in winter and entering in summer — this costs $500 to $2,000 depending on the size of the space, but cuts heating and cooling use by 10 to 20 percent year-round.

Replacing an old air conditioner or furnace with an ENERGY STAR model uses 10 to 30 percent less electricity than the original. A new air conditioner costs $3,000 to $7,000 installed; a heat pump (which heats and cools) costs $4,000 to $8,000. These are large upfront costs, but they last 15 to 20 years and lower your bill every month.

Reduce water heating electricity

Water heating is the second-largest electricity use in most homes. Lowering your water heater's temperature from 140°F to 120°F saves money and is hot enough for showers and dishes. If you have an electric tank water heater, wrapping it in an insulation blanket ($20 to $40) reduces heat loss. Insulating the hot water pipes ($10 to $30 in materials) keeps water hot as it travels from the heater to your faucets, so you waste less water waiting for it to warm up.

Replacing an old electric water heater with an ENERGY STAR model cuts water heating electricity by 10 to 15 percent. A heat pump water heater uses 50 percent less electricity than a standard electric heater and costs $1,500 to $3,000 installed, though some utilities offer rebates that lower the cost. A tankless water heater heats water on demand rather than keeping a tank hot all day, which saves 24 to 34 percent of water heating electricity, but costs $1,000 to $3,000 installed and requires a larger gas line or electrical circuit in most homes.

Cut appliance and lighting electricity

Refrigerators, washing machines, dishwashers, and dryers run frequently and use significant power. An ENERGY STAR refrigerator uses about 40 percent less electricity than a model from 15 years ago; a new dishwasher uses 30 percent less than an old one. If an appliance is more than 10 years old and runs daily, replacing it usually pays for itself in lower bills within 5 to 10 years. Check the yellow EnergyGuide label on new appliances to compare estimated yearly electricity cost.

For lighting, LED bulbs use 75 percent less electricity than incandescent bulbs and last 25 to 50 times longer. Replacing all the bulbs in your home costs $30 to $100 and cuts lighting electricity by 75 percent. Motion sensors on outdoor lights and dimmer switches in rooms you do not always use at full brightness save smaller amounts but add up if you have many lights.

Unplugging devices when not in use and using power strips to turn off entertainment systems, computer setups, and phone chargers saves 5 to 10 percent of total electricity use. Devices in standby mode (like televisions waiting for a remote signal) draw power constantly, though usually small amounts. A power strip costs $10 to $30 and lets you cut standby power with one switch.

Use time-of-use rates if available

Some utilities charge different rates depending on the time of day. Off-peak hours (usually late evening, night, and early morning) cost less, while peak hours (usually late afternoon and early evening) cost more. If your utility offers this pricing, running your dishwasher, laundry, and pool pump during off-peak hours can lower your bill without using less electricity overall.

Check your utility bill or call your provider to ask whether time-of-use rates are available in your area. Some utilities offer them only to customers who request them, while others require a smart meter installation. If available, calculate whether the savings from shifting when you run appliances outweigh any inconvenience — for many households, it saves $10 to $30 per month.

Track your progress over time

After you make changes, compare your electricity use month to month. Your utility bill shows total kilowatt-hours used; tracking this over a year accounts for seasonal changes (summer cooling and winter heating). If you made multiple changes at once, you will not know which one saved the most, but you will see the total effect on your bill.

Some utilities offer online portals or apps that show your electricity use by day or hour, which helps you spot patterns — like whether your air conditioner is running more than expected, or whether a new appliance uses more power than the old one. If your utility does not offer this, a home energy monitor ($100 to $300) plugs into your electrical panel and shows real-time use on a display or smartphone app.

Frequently Asked Questions

How much money can I save by cutting electricity use?

Savings depend on your current use, local electricity rates, and which changes you make. Adjusting your thermostat saves 10 to 15 percent of heating and cooling costs. Replacing old appliances or adding insulation saves 10 to 30 percent overall. At the U.S. average rate of about 16 cents per kilowatt-hour, a household using 900 kilowatt-hours per month spends roughly $144 monthly; cutting use by 20 percent saves about $29 per month or $350 per year.

Do smart thermostats really save electricity?

A smart thermostat saves electricity only if you actually use its scheduling features to lower temperature in winter or raise it in summer when you are away or asleep. If you set it once and never adjust it, it saves nothing. A basic programmable thermostat does the same job for less money if you are willing to set the schedule yourself.

Are LED bulbs worth the cost?

LED bulbs cost $2 to $5 each compared to 50 cents for an incandescent, but they use 75 percent less electricity and last 25 to 50 times longer. An LED bulb used three hours per day pays for itself in electricity savings within one to two years, then saves money for the rest of its life. For frequently used lights, they are worth buying immediately.

What is the cheapest way to lower my electricity bill?

Adjusting your thermostat costs nothing and saves 10 percent of heating and cooling costs immediately. Sealing air leaks with weatherstripping costs $10 to $50 per opening and takes an hour. Replacing incandescent bulbs with LEDs costs $30 to $100 total for a whole home. These three changes together cost under $200 and typically save 15 to 25 percent of electricity use.

Should I unplug everything when I am not using it?

Unplugging devices saves standby power, which typically accounts for 5 to 10 percent of home electricity use. Unplugging things manually is inconvenient, so a power strip ($10 to $30) that you switch off is more practical. Focus on entertainment systems, computer setups, and phone chargers rather than refrigerators or always-on devices.