How to lower your electric bill: 15 tips to reduce energy costs

The average American household will spend over $75,000 on electricity over the next 25 years, according to EnergySage Marketplace data. With rates rising faster than inflation, that number is only going up. But thankfully, there's a lot you can do about it, whether you have $0 or $30,000 to invest.

Below, you'll find 15 ways to lower and reduce your electric bill, including quick wins that cost nothing to long-term investments that pay off for decades. Not sure why your bill jumped in the first place? Start with our guide to why your electric bill is so high before diving in here.

These tips cost nothing and can start saving you money immediately. No tools, no contractors, no upfront investment required.

1. Adjust your thermostat settings

Your heating and cooling system is responsible for nearly half of your home's total energy use—which means your thermostat is one of the most powerful levers you have. Turning your thermostat back 7°F to 10°F from its normal setting for eight hours a day can save up to 10% a year on heating and cooling costs.

In winter, aim for 68°F when you're home and lower when you're asleep or away. In summer, 78°F is the sweet spot when you're home—every degree lower adds about 3% to your cooling costs. Pair this tip with a smart thermostat to automate the savings without thinking about it (more on this below).

2. Eliminate phantom loads

Devices plugged into your wall use electricity even when they're turned off—this is called a phantom load, standby power, or vampire energy. Standby power accounts for 5% to 10% of residential energy use and can cost the average household up to $183 a year for doing essentially nothing.

The biggest culprits are TVs, cable boxes, gaming consoles, audio equipment, and phone chargers left plugged in. The easiest fix is a smart power strip ($15-$40), which automatically cuts power to devices when they're not in use. If you'd rather spend nothing, simply unplugging devices you don't use regularly has the same effect and adds up quickly over time.

3. Change your laundry habits

About 90% of the energy your clothes washer uses goes toward heating water. Switching to cold water for laundry cuts that energy use significantly, saving the average household $60 a year with zero upfront cost.

A few other habits that reduce your electric bill without spending a dime:

• Dry loads back to back: The dryer retains heat from the first load, so the second needs less energy to warm up.

• Only run full loads: A half-full washer or dryer uses nearly the same energy as a full one.

• Air dry when possible: Hanging clothes costs nothing and extends their lifespan.

4. Lower your water heater temperature

Most water heaters come factory-set to 140°F, which is higher than most households need and expensive to maintain. Lowering it to 120°F is safe for most homes, reduces standby heat loss, and can make a real dent in your water heating costs—all for the cost of five minutes of your time and zero dollars upfront. It also reduces the risk of scalding.

Check your water heater's thermostat, it's usually a dial behind an access panel on the tank, and adjust it down. One of the highest-return, lowest-effort changes on this list.

5. Run appliances at the right time

Many utility companies charge more for electricity during peak-demand hours, typically late afternoon and evening on weekdays. If your utility offers time-of-use (TOU) pricing, shifting when you run your dishwasher, clothes washer, dryer, and EV charger to off-peak hours (usually nights and weekends) can save you 25% or more per cycle.

Check your utility bill or call your provider to find out if TOU pricing is available in your area. Running the dishwasher before bed instead of after dinner is a small change that costs nothing.

These upgrades require some upfront spending but typically pay for themselves within one to three years—and continue saving you money for years after that.

6. Switch to LED lighting

Swapping incandescent bulbs for LEDs is one of the cheapest and fastest-payback upgrades you can make. At $2 to $10 per bulb, most homes can replace all their lighting for well under $200. At roughly $225 a year in savings, you'll recoup the investment within the first year. LEDs use about 75% less energy than incandescent bulbs and last 25 times longer, so you'll also save on replacement costs over time.

7. Install a smart thermostat

A smart thermostat automatically adjusts your home's temperature based on your schedule, preferences, and even local weather—so you're not heating or cooling an empty house. ENERGY STAR-certified smart thermostats save an average of about 8% on heating and cooling bills, or roughly $50 a year, with an upfront cost of $100 to $300 depending on the model.

Most are straightforward to install yourself, and many utility companies offer rebates that can bring the cost down significantly. Some programs offer smart thermostats for free or heavily discounted to customers who enroll in demand-response programs.

8. Weatherize and seal air leaks

If your home feels drafty in winter or struggles to stay cool in summer, you're probably paying for it. Air leaks around windows, doors, vents, and electrical outlets let conditioned air escape and outside air seep in which forces your heating and cooling system to work harder than it needs to. Sealing those leaks can save an average of 15% on heating and cooling costs, with a typical upfront investment of just $50 to $200 in weatherstripping, caulk, and foam sealant—making this one of the fastest-payback upgrades available.

Focus on doors and windows first, then check electrical outlets on exterior walls and gaps around pipes and wires. A home energy audit can help you pinpoint the biggest leaks before you start.

9. Get a home energy audit

A home energy audit is one of the most effective first steps you can take to reduce your electric bill. Many utilities offer free or reduced-cost audits ($0 to $150 if you pay out of pocket), and a professional auditor will identify exactly where your home is losing energy and which upgrades will deliver the highest return.

Acting on audit recommendations can reduce your overall energy costs by 5% to 30%. If you're planning any larger upgrades, such as insulation, HVAC, or solar, an audit first ensures you're sizing and sequencing those investments correctly, potentially saving you thousands in the process.

10. Subscribe to community solar

If solar panels aren't an option for you right now—whether you rent, live in an apartment, or have a roof that doesn't work for panels—community solar is the next best thing. You subscribe to a share of a local solar farm and receive bill credits for the electricity it generates, typically at a 5% to 15% discount off your standard utility rate. No installation, no upfront cost, no long-term commitment, and you can cancel anytime.

These upgrades cost more upfront but deliver the largest long-term savings and for most homeowners, the math works out strongly in their favor over time.

11. Add or upgrade insulation

If your home was built before 1980, there's a good chance your insulation is underperforming by modern standards—and you're paying the difference on your heating and cooling bills every month. Properly insulating your attic, walls, and floors can save an average of 15% on heating and cooling costs that compound over time. Attic insulation typically runs $1,500 to $4,000 depending on your home's size, with the attic offering the best return since heat rises and escapes through the roof.

An energy auditor can tell you exactly where you're losing the most heat and which type of insulation makes sense for your home—worth considering before you spend anything.

12. Upgrade to energy-efficient appliances

When it's time to replace a major appliance, choosing an energy-efficient model pays off over the life of the appliance—which is typically 10 to 20 years. Energy-efficient washing machines, refrigerators, and dishwashers use significantly less energy and water than standard models, saving the average household about $450 a year. The upfront cost premium varies by appliance and brand, but your utility company may offer rebates that help offset it.

13. Upgrade your heating and cooling system

Heating and cooling account for nearly half of a home's total energy use—making your HVAC system one of the highest-impact upgrades available. If your system is more than 10 years old, replacing it with a modern heat pump is worth a serious look.

Heat pumps handle both heating and cooling in one system and are far more efficient than traditional HVAC. But whether they lower your electric bill specifically depends on what you're replacing. If you currently heat with propane, oil, or electric resistance heat, switching to a heat pump will almost certainly reduce your energy costs. If you heat with natural gas, the math is less clear—your electric bill may go up even as your total energy spend goes down.

Average installation costs run about $14,700 for a ducted system before incentives, according to EnergySage Marketplace data. For a more detailed look at whether a heat pump makes sense for your home, visit our heat pump savings guide.

14. Install a heat pump water heater

Water heating is one of the biggest energy users in a typical home and heat pump water heaters are one of the highest-return upgrades you can make. They use about 70% less energy than standard electric water heaters by pulling heat from the surrounding air rather than generating it directly, saving a household of four roughly $550 a year. Upfront cost typically runs $1,500 to $3,500, but state, local, and utility incentives are available in many areas and can significantly reduce what you pay out of pocket.

15. Go solar

Installing solar panels is one of the most effective ways to reduce—or eliminate—your electric bill for the long term. Rather than just using less electricity, solar lets you generate your own, insulating you from rising utility rates for decades. The average EnergySage shopper pays about $31,000 for a solar panel system before incentives, with an average payback period of about 10 years. After that, you're generating free electricity for the remaining life of your panels, typically 25 to 30 years.

State, local, and utility incentives are still available in many areas even after the expiration of the federal solar tax credit. Visit the EnergySage Marketplace to compare quotes from vetted installers and see how much you could save.

Summer is when most American households see their highest electric bills. Here's why summer costs more and what you can do about it.

Utilize ceiling fans

Ceiling fans don't actually cool the air, they create a wind-chill effect that makes you feel cooler. That means you can set your thermostat 4°F higher without noticing a difference in comfort—which translates to meaningful savings on your cooling bill. Just remember to turn fans off when you leave the room as they cool people, not spaces.

Make sure your ceiling fans are set to run counterclockwise in summer (most fans have a switch on the motor housing) to push air downward and create that cooling effect.

Raise your AC temperature strategically

Every degree you raise your thermostat in summer saves about 3% on cooling costs. Setting it to 78°F when you're home, 82°F when you're away, and 85°F when you're sleeping with a ceiling fan running can meaningfully reduce your summer bill without sacrificing comfort.

Block heat before it enters your home

Up to 76% of sunlight that hits standard windows enters your home as heat. Closing blinds and curtains during the hottest part of the day, typically between 10am and 4pm, keeps your home cooler and reduces how hard your AC has to work. Blackout curtains or solar shades are a relatively inexpensive upgrade that can make a noticeable difference.

Keep your AC maintained

A well-maintained air conditioner runs more efficiently and costs less to operate. Replace your air filter every one to three months during heavy use—a clogged filter forces the system to work harder and uses more energy. Scheduling a professional tune-up before the summer season can also catch small issues before they become expensive repairs.

Whether you start with a simple thermostat adjustment or a full solar installation, every step toward a more energy-efficient home adds up over time. If you own your home and want to make the biggest long-term impact on your electric bill, solar is worth a serious look.