How to Lower Your Electric Bill: 12 Practical, Sourced Ways

The most effective ways to lower your electric bill target the biggest uses first: heating and cooling, water heating and lighting. Adjusting your thermostat, sealing air leaks, switching to LED bulbs, cutting standby power and choosing the right rate plan are all backed by Department of Energy, ENERGY STAR and EIA guidance. How much you save depends on your home, climate and rates.

The average US home paid $209 in August 2026. Below are practical steps, roughly ordered from free to larger investments, with the official source for each.

Start by knowing where your electricity goes

EIA reports that in 2020 the three largest uses of residential electricity were air conditioning (19%), space heating (12%) and water heating (12%), followed by lighting and refrigerators (EIA: Electricity use in homes). That is why the biggest savings usually come from heating, cooling and hot water rather than from small gadgets.

To estimate what any single appliance costs, use the Department of Energy's formula: wattage × hours used per day ÷ 1,000 = kWh per day, then multiply by your rate (DOE Energy Saver).

Free and no-cost ways to lower your electric bill

1. Adjust your thermostat

DOE says you can save as much as 10% a year on heating and cooling by turning your thermostat back 7°F to 10°F for 8 hours a day from its normal setting, for example while you sleep or are away. DOE recommends about 68°F to 70°F in winter while you are awake, and in summer setting the thermostat as high as is comfortable when you need cooling (DOE Energy Saver: Thermostats). ENERGY STAR suggests about 78°F for room air conditioners (ENERGY STAR).

One caution from DOE: programmable setbacks are generally not recommended for heat pumps in heating mode, because a deep setback can make the system run inefficiently. A moderate setting is usually the most cost-effective for heat pumps.

2. Use ceiling fans to feel cooler

DOE says using a ceiling fan lets you raise the thermostat setting by about 4°F without reducing comfort (DOE Energy Saver: Fans for Cooling). Fans cool people, not rooms, so switch them off when you leave.

3. Cut standby power

DOE estimates standby power accounts for 5% to 10% of residential energy use and could cost the average household as much as $100 a year. It recommends plugging devices into a power strip and switching it off when not in use, and unplugging things you rarely use, while keeping items like the refrigerator plugged in (DOE Energy Saver). Our phantom power guide explains how to find the worst offenders.

4. Use less hot water

DOE says water heating accounts for about 18% of home energy use and is typically the second-largest energy expense. It lists four ways to cut the cost: use less hot water, lower the water heater thermostat, insulate the water heater and pipes, and buy a more efficient water heater when it's time to replace (DOE Energy Saver: Water Heating). See the cost estimate on our electric water heater page.

5. Use room AC units wisely

For window and room air conditioners, DOE and ENERGY STAR both advise keeping lamps and TVs away from the thermostat, since their heat makes the unit run longer. DOE also notes that a colder setting won't cool a room faster (DOE Energy Saver: Room Air Conditioners, ENERGY STAR).

Low-cost upgrades

6. Switch to LED lighting

DOE says LEDs use up to 90% less energy and last up to 25 times longer than traditional incandescent bulbs, and that the average household saves about $225 in energy costs per year by using LED lighting (DOE Energy Saver: Lighting Choices).

7. Seal air leaks and add insulation

ENERGY STAR says the EPA estimates homeowners can save an average of 15% on heating and cooling costs (or an average of 11% on total energy costs) by air sealing and adding insulation in attics, floors over crawl spaces and basements. It also notes that 9 out of 10 U.S. homes are under-insulated (ENERGY STAR: Why Seal and Insulate). Weatherstripping doors and caulking gaps are common do-it-yourself starting points.

8. Install a programmable or smart thermostat

DOE notes programmable thermostats can return temperatures to normal before you wake or return home, so you get setback savings without discomfort (DOE).

9. Use advanced power strips

The Ohio Consumers' Counsel notes that regular power strips only reduce standby power when their switch is turned off, while advanced ("smart") power strips can shut down idle devices automatically using a timer, motion sensor or current sensor (Ohio Consumers' Counsel).

Bigger investments to consider

10. Get a home energy assessment

DOE recommends a home energy assessment (energy audit) as the first step before making energy-saving improvements. A professional assessment may use blower doors and infrared cameras to find where your home wastes energy (DOE Energy Saver: Home Energy Assessments). Many utilities offer assessments or rebates; check yours.

11. Choose ENERGY STAR appliances when you replace

When an appliance needs replacing, ENERGY STAR models are a straightforward way to cut use. DOE notes ENERGY STAR products often have lower standby power than comparable models (DOE), and ENERGY STAR ceiling fans are up to 60% more efficient than conventional models (DOE).

12. Consider solar

If you own your home, rooftop solar can reduce how much electricity you buy from the utility. Payback varies widely by state, roof and rate. Note that the federal residential clean energy tax credit does not apply to systems where installation is completed after December 31, 2025. See our solar payback by state page for local estimates.

Lower the price you pay, not just the kWh

• Review your rate plan. DOE advises not to assume your current rate fits how you use power today, noting that "the current rate may be based on usage dating back a decade or longer" (DOE: Evaluating Your Utility Rate Options). Ask your utility which residential rates you qualify for.
• Consider time-of-use. EIA notes wholesale costs are usually highest in the afternoon and early evening, and some utilities offer time-of-day pricing (EIA). If you can shift laundry, dishwashing or EV charging to off-peak hours, a time-based rate may help. If you can't, it may cost more.
• Shop for supply if your state allows it. In deregulated states, you can buy supply from a provider other than your utility (DOE). Read contract terms carefully, especially what happens when a fixed rate ends.
• Ask about assistance. The federal LIHEAP program helps eligible households with energy bills and weatherization through local offices. The National Energy Assistance Referral hotline is (866) 674-6327 (HHS LIHEAP FAQ).

Quick checklist

Action	Cost	What the source says
Thermostat setback 7–10°F for 8 hours/day	Free	Up to 10% a year on heating and cooling (DOE)
Ceiling fan in occupied rooms	Free if installed	Raise thermostat about 4°F with same comfort (DOE)
Switch off or unplug idle electronics	Free to low	Standby is 5–10% of home energy use (DOE)
LED bulbs	Low	Up to 90% less energy than incandescent (DOE)
Air sealing and insulation	Low to moderate	Average 15% on heating and cooling (EPA via ENERGY STAR)
Review rate plan	Free	Current rate may not fit your usage (DOE)

Next steps

Check your state's rate on our electricity rates hub, then use the electric bill calculator to see how a lower kWh total would change your monthly bill. If your bill jumped recently, start with why is my electric bill so high?