Short answer: To lower your electric bill, start with the loads that use the most electricity (heating, cooling and water heating), then trim standby power and lighting. Small changes add up slowly, and larger cuts usually come from sealing and insulating or upgrading equipment. Savings depend on your home, climate and rate plan, so the worked example below is an illustration, not a forecast for your home.
This guide is about reducing consumption. Generating or storing your own electricity is a different subject.
Step 1: Know where your electricity goes
The U.S. Energy Information Administration (EIA) reports that the average U.S. household uses about 10,500 kilowatt-hours (kWh) a year, roughly 875 kWh a month. In its 2020 data, air conditioning was about 19% of residential electricity use, space heating about 12% and water heating about 12%. About 89% of homes use air conditioning. Shares differ a lot by climate and by whether your heating and water heating run on electricity or gas.
Source: EIA, Electricity use in homes (page last updated December 18, 2023).
Step 2: Understand kW versus kWh
You are billed for energy (kWh), not power (kW). The EIA gives this example: a 40-watt bulb running for five hours uses 0.2 kWh. Multiply a device's watts by hours of use, divide by 1,000, then multiply by your rate per kWh. See EIA, Measuring electricity.
An illustrative example (assumptions stated)
The EIA's Short-Term Energy Outlook put the 2026 average U.S. residential price near 18 cents per kWh, so this example uses $0.18/kWh and a home using 875 kWh a month. That gives an illustrative energy charge of $157.50. It excludes fixed charges, taxes and other tariff components, which your actual bill will include and which do not fall when you use less. Heating and cooling are taken as 31% of use (the national 19% + 12% shares above), which overstates the share for a home that heats with gas.
| Change | Assumption | kWh/month | $/month |
|---|---|---|---|
| Thermostat setback | Upper-end DOE figure of 10% applied to heating and cooling electricity (31% of use) | 27 | 4.88 |
| LED bulbs | Five 60 W bulbs replaced by 9 W LEDs, 3 hours a day | 23 | 4.13 |
| Standby power | 30 W of always-on draw removed | 22 | 3.94 |
| Total | 72 | 12.95 (about 8% of the $157.50 illustrative energy charge) |
The 8% comes from these stated assumptions only. It is not a typical or promised result.
Heating and cooling: the biggest lever
Set back the thermostat
The Department of Energy (DOE) says you can save as much as 10% per year on heating and cooling by turning your thermostat down 7–10°F for 8 hours a day in fall and winter. That refers to heating and cooling costs, not automatically your entire electric bill, and it is a maximum. If you have a heat pump, the DOE cautions against setbacks that trigger backup electric-resistance heat and says to use a smart or programmable thermostat designed for heat pumps. Source: DOE Energy Saver Guide (2022), p. 12 and p. 16.
Seal and insulate
ENERGY STAR reports that EPA estimates average savings of 15% on heating and cooling costs, or 11% of total energy costs, from air sealing and insulating (results vary by home). Start with attic air leaks and insulation. ENERGY STAR methodology.
Check ducts and windows
The DOE's home energy checklist says keeping ducts in good repair can prevent heat loss of up to 60% at the registers, and that the typical home loses more than 25% of its heat through windows. These are the DOE's stated upper-end and typical-home figures for heat loss, not guaranteed bill reductions. The DOE's Energy Saver Guide adds that leaky ducts in attics or crawl spaces can add hundreds of dollars a year to heating and cooling bills. Sources: DOE home energy checklist and the Energy Saver Guide, p. 13.
Water heating
The DOE checklist says water heating can account for 14%–25% of the energy used in your home and advises turning the water heater down to the warm setting (120°F). Check your manual and household needs before changing a setting.
Standby power and lighting
Electronics that are switched off can still draw power. The DOE guide says this could add 5%–10% to your monthly utility bill and recommends advanced power strips. A Lawrence Berkeley National Laboratory study of ten California homes (published 2000, so dated) found standby loads of 14–169 W per home, averaging 67 W, or 5%–26% of annual use. A 30 W always-on draw adds up to about 263 kWh a year, or about $47 at $0.18/kWh. Measure yours with a plug-in watt meter. Source: LBNL, Whole-house measurements of standby power.
LED bulbs use much less electricity than incandescent bulbs for the same light, so replace the bulbs you use most first.
Helpful if you still have older incandescent or halogen bulbs in the rooms you use most. Buying note: check the base type, the brightness in lumens and the color temperature on the listing, and confirm the bulb is rated for any dimmer switch it will be used on.
View the LED bulbs on AmazonSpace heaters
Electric resistance heating turns all the electricity it uses into heat. A 1,500 W heater running 8 hours uses 12 kWh, about $2.16 a day or $65 a month at $0.18/kWh. The DOE says heat pumps can cut heating electricity by roughly half compared with resistance heating in most climates. Source: DOE, Electric resistance heating.
Check your rate plan
If your utility offers time-of-use rates, shifting laundry or dishwashing to off-peak hours may lower the bill without reducing kWh. Ask your utility about rate plans, rebates and home energy audits.
Renters: what you can do
- Use LED bulbs, advanced power strips and a plug-in watt meter.
- Use draft stoppers and removable window film, and ask your landlord about sealing and thermostat upgrades.
- Use a thermostat schedule if you control the thermostat.
Conclusion
There is no single trick. Find your largest loads, fix the cheap problems first (thermostat settings, air leaks, standby loads, bulbs), then plan larger upgrades. Track your kWh on the bill so you can see what changed.
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