How to Lower Your Electric Bill: What Actually Moves the Number

Short answer: your bill is the kWh you use times the price you pay for each one, so you can only lower it by using fewer kWh, paying less per kWh or making some of your own. Three uses are the biggest: air conditioning, space heating and water heating took 43% of the electricity US homes used in 2020 (EIA). Start there. Turning the thermostat back when you sleep or go out and setting the water heater to 120°F cost nothing. A heat pump water heater or sealing air leaks cost money but save the most in a house. LED bulbs and switching electronics fully off help, but lighting is only about 6% of use.

Before you change anything, look at your last bill: how many kWh you used and what each one cost. Our average electric bill by state shows where you stand against your state.

Where your electricity goes

The EIA’s Residential Energy Consumption Survey measures how homes use electricity. These are the biggest uses in 2020, averaged over all 123.5 million US homes, including the ones that don’t have that appliance or heat with gas (RECS 2020, Tables CE5.1a, CE5.1b and CE2.1). The cost column is our calculation at the US average price from January to August 2026, 18.2¢ per kWh (EIA):

Use	Share of home electricity	Per average home a year	At 18.2¢ per kWh
Air conditioning	19%	2,055 kWh	$374
Space heating	12%	1,304 kWh	$237
Water heating	12%	1,264 kWh	$230
Refrigerators (all)	8%	835 kWh	$152
Lighting	6%	654 kWh	$119
TVs and related devices	6%	612 kWh	$111
Fans in the heating and cooling system	5%	498 kWh	$91
Clothes dryers	4%	452 kWh	$82
Separate freezers	2%	190 kWh	$35
Cooking	2%	189 kWh	$34

The average US home uses about 10,500 kWh a year. Your split depends on where you live: homes in the South are more likely to heat with electricity and use more air conditioning, and apartments in the Northeast use the least electricity of all, the EIA says. If you heat water or your home with gas, those rows are mostly on your gas bill instead.

The changes that save the most, ranked

Roughly in order of how much of your electricity each one reaches, with each saving as its source states it. Plug-in solar comes last because it doesn’t cut use; it replaces some of what you buy:

Change	Who can do it	What it can save	Upfront cost
Turn the thermostat back 7–10°F for 8 hours a day	Apartments and houses	Up to 10% a year on heating and cooling	None
Seal air leaks	Mostly houses	10–20% on heating and cooling	Low
Heat pump water heater (if yours is electric)	Houses, owners	1,880–3,760 kWh a year, by household size	High
Water heater at 120°F, insulate the tank and pipes	Apartments and houses	Tank 7–16%, pipes another 3–4% of water heating	None to low
Wash in warm or cold, dry on lower heat	Apartments and houses	Warm instead of hot halves a load’s energy	None
Switch off electronics fully	Apartments and houses	Idle electronics can add 5–10% to a monthly bill	None to low
LED bulbs	Apartments and houses	Up to 90% less energy per bulb	Low
Retire a second fridge	Apartments and houses	About $66 a year in 2020	None
Plug-in solar, where legal	Apartments and houses	Roughly $70–$490 a year for an 800 W kit	Medium

Heating and cooling: the thermostat first

You can save as much as 10% a year on heating and cooling by turning your thermostat down 7–10°F for 8 hours a day in fall and winter, and up in spring and summer, according to the Department of Energy’s Energy Saver Guide. If you have a heat pump, the same guide says not to do it without a smart or programmable thermostat designed for heat pumps.

A smart thermostat can do the schedule for you. ENERGY STAR puts the average saving of a certified model at about 8% of heating and cooling bills, or $50 a year, more or less depending on climate, comfort, occupancy and equipment (ENERGY STAR). In summer, the DOE guide also suggests closing window coverings during the day to block the sun’s heat and keeping the thermostat fan on “Auto”, unless a professional has set your system to run continuously for indoor air quality.

In a house, sealing air leaks around windows, doors, outlets and other openings can save 10–20% on heating and cooling, the guide says. Renters should ask the landlord before changing anything fixed to the building.

Hot water: the second big one

If your water heater is electric, it’s one of your biggest loads. The DOE guide recommends setting it to 120°F, a temperature it calls safe for most people, and says insulating a tank that’s warm to the touch can save 7–16% a year on water heating, and insulating the hot water pipes another 3–4% (follow the maker’s instructions).

When an electric water heater needs replacing, a heat pump model is the biggest single cut on this list. ENERGY STAR says a certified heat pump water heater saves 1,880 kWh a year for a household of two and 3,760 kWh for a household of four compared with a standard electric model (ENERGY STAR). ENERGY STAR prices that at 14.6¢ per kWh, $270 to $550 a year, with a payback of about three years for a household of four on an extra cost of $1,503. At this year’s 18.2¢ average it’s about $340 to $680 a year (our calculation). This one is for owners: a renter can ask, but it’s the landlord’s equipment.

Laundry, electronics, lights and the fridge

• Laundry: most of a clothes washer’s energy goes to heating water. Washing in warm instead of hot can cut a load’s energy in half, and cold saves more. ENERGY STAR certified dryers use about 20% less energy than conventional models, and on any dryer the guide suggests lower heat settings (DOE).
• Electronics: many keep drawing power when switched off, which could add 5–10% to a monthly bill, the DOE says. Advanced power strips, with timers, activity monitors or remotes, stop electronics from drawing standby power when they aren’t in use. Setting a TV to its “home” or “standard” picture mode reduces its energy use by 18–30%.
• Lights: an ENERGY STAR certified LED bulb uses up to 90% less energy than an old incandescent and can save about $55 over its life, according to the guide. If your bulbs are already LED, there is little left here: lighting is about 6% of home electricity.
• Fridges: a second refrigerator cost about $66 to run in 2020 (EIA), and 34% of homes had two or more refrigerators. ENERGY STAR says an old refrigerator uses about 20% more energy than a certified one and recommends recycling it when you replace it (ENERGY STAR). Our guide to how many watts a refrigerator uses has the numbers by type and size.

Make some of your own power

Plug-in solar is the one option that works in an apartment and doesn’t ask you to use less. An 800 W kit facing south with no shade saves roughly $70 to $490 a year depending on your state, your sun and how you mount it. At an example price of $1,000 on a stand, it pays for itself in about 2 years in Honolulu but 7 to 10 years where power is cheapest. Our math by state shows every assumption, and the calculator works it out for your spot.

Check the rules first. Whether you can plug one in without your utility’s approval depends on your state’s law (plug-in solar laws by state) and your utility. Renters also need the lease and the landlord; owners, any HOA rules.

If the bill is hard to pay

The Department of Energy’s Weatherization Assistance Program lowers energy costs for low-income households by making their homes more efficient. The households it serves save $372 or more a year on average, according to a national evaluation the program cites. Your utility may also have its own efficiency rebates or bill assistance: ask it directly.

Bottom line

Start with what’s free and reaches the biggest loads: the thermostat schedule, the water heater at 120°F, warm or cold laundry and electronics switched fully off. In a house, sealing leaks and a heat pump water heater, when the old one is due, cut the most kWh. LED bulbs are cheap but no longer a big lever if you already have them. And if the price per kWh is what hurts, look at making some of your own, once you know your state allows it.

How we got these numbers

The end-use shares and kWh come from the EIA’s 2020 Residential Energy Consumption Survey (Tables CE5.1a and CE5.1b, released June 2023 and revised March 2024): each end use’s total household electricity, divided by total residential electricity (Table CE2.1, 4,453 trillion Btu) for the share, and by 123.53 million homes for the kWh per home, at 3,412 Btu per kWh. The averages include homes that don’t have that use. The costs are our calculations at the EIA’s US residential average for January to August 2026, 18.2¢ per kWh (Electric Power Monthly Table 5.6.B). Each saving in the ranked table is as stated by the DOE Energy Saver Guide (2022), ENERGY STAR or the EIA, linked above; they don’t add up, because each applies to a different part of the bill. Data checked October 27, 2026.