The average American household spends about $150/month on electricity. That's $1,800/year — and it's climbing. But most families waste 20-40% of their electricity on things that can be easily fixed. Here's where your money is going and how to keep more of it.
Where Does Your Electricity Go?
Understanding what uses the most power is the first step to cutting your bill:
Average Electricity Breakdown
Heating & Cooling: 40-50% of your bill
Water Heating: 12-18%
Appliances (fridge, washer, dryer): 13-15%
Lighting: 9-12%
Electronics & Media: 5-8%
Cooking: 3-5%
Other (fans, pumps, chargers): 5-10%
The biggest savings come from addressing heating/cooling and water heating — they account for over half your bill.
Quick Wins (No Cost)
1. Adjust your thermostat. Every degree you adjust saves 1-3% on your bill. Set it to 68°F in winter and 78°F in summer. Use a programmable thermostat to reduce heating/cooling when you're sleeping or away.
2. Unplug phantom loads. Electronics draw power even when "off." A TV on standby, phone chargers plugged in, gaming consoles in sleep mode — these "phantom loads" can add $100-$200/year. Use power strips and switch them off when not in use.
3. Use cold water for laundry. About 90% of the energy used for washing clothes goes to heating the water. Cold water cleans just as well for most loads and saves $60-$100/year.
4. Air dry clothes when possible. Your dryer is one of the most energy-hungry appliances. Air-drying even half your loads saves $50-$80/year.
5. Close blinds and curtains strategically. In summer, close south and west-facing blinds during the day to block heat. In winter, open them to let sunlight warm your rooms naturally.
Low-Cost Improvements ($10-$100)
6. Switch to LED bulbs. LEDs use 75% less energy than incandescent bulbs and last 25 times longer. Replacing 20 bulbs saves $100-$200/year. At $2-$5 per bulb, they pay for themselves in months.
7. Seal air leaks. Gaps around windows, doors, and outlets let conditioned air escape. A $5 tube of caulk and $10 in weatherstripping can save $100-$200/year on heating and cooling.
8. Install a smart thermostat. Smart thermostats learn your schedule and optimize heating/cooling automatically. They typically save 10-15% on HVAC costs, or $100-$200/year. They cost $100-$250 and often qualify for utility rebates.
9. Lower your water heater temperature. Most water heaters are set to 140°F from the factory. Lowering to 120°F saves 6-10% on water heating costs and reduces scalding risk. It's free to adjust.
10. Add door sweeps. The gap under exterior doors is a major source of air leakage. Door sweeps cost $5-$15 and take minutes to install.
Bigger Investments ($100-$1,000+)
11. Upgrade to ENERGY STAR appliances. When it's time to replace an appliance, ENERGY STAR models use 10-50% less energy. A new refrigerator alone can save $50-$100/year compared to a model from 10+ years ago.
12. Add insulation. Proper attic insulation is one of the highest-ROI home improvements. It costs $1,000-$2,000 for most homes and can reduce heating/cooling costs by 15-25%.
13. Install ceiling fans. Fans cost pennies per hour to operate and can make a room feel 4-6°F cooler. In summer, running a fan lets you raise the thermostat by 4°F without losing comfort, saving significant AC costs.
💡 Biggest Electricity Wasters by Cost Per Year
Old central AC (10+ years): $400-$800/year to run
Electric water heater: $300-$500/year
Pool pump: $300-$500/year
Old refrigerator: $150-$300/year
Clothes dryer: $100-$200/year
Desktop computer (always on): $50-$150/year
Know Your Rates
14. Switch to time-of-use pricing. Many utilities offer cheaper rates during off-peak hours (typically nights and weekends). Running your dishwasher, laundry, and EV charger during off-peak times can save 20-30% on those loads.
15. Shop for electricity providers. In deregulated energy markets (Texas, Pennsylvania, Ohio, and others), you can compare providers and switch to lower rates. This alone can save 10-20% with no lifestyle changes.
Calculate Your Appliance Costs
Use our electricity cost calculator to find out exactly how much each appliance costs to run per month and per year. You might be surprised which ones are the biggest energy hogs.
Electricity Cost Calculator
Find out how much each appliance costs to run per month and per year.
More Useful Tools
BTU Calculator
Make sure your AC/heater is the right size for your room.
Calculate →EV Savings
See how much an EV saves vs gas (including electricity costs).
Compare →Savings Goal
Put your energy savings toward a financial goal.
Plan Savings →The Bottom Line
You don't need to live in the dark or sweat through summer to save on electricity. A combination of free habit changes and low-cost improvements can cut your bill by 20-40% — that's $360-$720 per year back in your pocket. Start with the free tips, then invest in the upgrades that give you the best return.