How to Lower Your Energy Bill

Stressed and worried young Asian woman working from home, handling paperworks and going through her financials

If you're looking for a way to squeeze extra cash out of your monthly budget, you may be eyeing your electricity bill as a possible source of savings. The average monthly electricity bill for residential customers in the United States is $115 per month—and whether yours is higher or lower, when combined with other utilities, it can make budgeting goals difficult to meet.

Fortunately, you can work to lower your energy bill, even during a frigid winter or scorching hot summer months. Depending on where you live, you may also have the option to choose another provider or negotiate a lower rate.

Check out these simple changes to reduce energy costs and free up more cash each month.

How to Save on Electricity

Reducing overall energy consumption and using energy more efficiently are the two primary ways renters and homeowners can save money on electricity costs. Making some of these changes can be free or low-cost, while more ambitious long-term solutions may require an investment. Here are some ideas to help you get started:

  • Minimize wasteful energy usage. Always shut off lights and appliances that are not in use.
  • Reduce energy use from vampire loads. Vampire loads, or electricity used by electronics and appliances that remain plugged in when they're not in use, can get costly. Plugging these items into power strips that you can turn off each night can save you.
  • Use power during off-peak times. Many utility providers have programs that offer reduced rates or rebates on electricity used during off-peak hours. If you're not already on this type of plan, check with your provider to find out what your options are.
  • Use LED light bulbs and dimmer switches. The upfront investment for LED light bulbs is slightly higher, but they last longer than incandescent bulbs. Dimmer switches allow you to adjust the brightness in the space.
  • Download a usage-tracking app. These apps can tell you how energy is consumed in your home so you can identify ways to cut costs. Consider downloading the Sense app to monitor energy used by electronics and household appliances. If you have solar panels, the SolarEdge Monitoring app tells you how much solar energy is produced by the panels.
  • Get a home energy audit. Some utility providers will come out to your home, assess the space and offer suggestions to help lower your energy usage for free. You can also hire an independent company to perform an energy audit for a fee.
  • Take advantage of renewable energy tax credits. You may qualify for a federal tax credit if you install specific renewable-energy systems in your home. Visit Energy Star's website to learn more about the types of systems covered.
  • Use an energy-efficient water heater. If you're thinking about purchasing a new water heater, consider energy-efficient models or even those that do not use any electricity.
  • Purchase energy-efficient appliances, electronics and lighting. Energy Star appliances that meet the U.S. Department of Environmental Protection's (EPA) energy efficiency standards can help reduce energy use, lowering your energy bill.
  • Consider adding solar panels. Solar panels use energy from the sun's rays to produce power. The cost savings of solar power over time can be significant, although a hefty initial investment is typically required. If you are interested in solar panels, you'll need to decide whether you want to rent or own them. offers a Homeowner's Guide to Going Solar if you're thinking about making the switch.

How to Save on Heating and Cooling

The cost of heating and cooling your home can also add up, especially if you live in an area with extreme weather conditions. There's no way to control the weather, but you can control the climate in your home and save money along the way with these tips:

  • Purchase a new thermostat. Programmable thermostats allow you to control the temperature in your home on a schedule. They also allow you to turn your unit off while you're away and set the thermostat to power on a few minutes before you return home. Manual programmable thermostats are inexpensive, while others have a mobile app you can use to adjust your home's temperature with a few taps when away from home.
  • Run ceiling fans. Instead of blasting the A/C, use ceiling fans to keep cool. Just don't forget to turn them off when you leave a room.
  • Improve your home's insulation. Proper insulation helps keep your home at the temperature you prefer without constantly triggering the heater or air conditioner.
  • Close all doors and windows and layer up during colder months. Turn the thermostat down in your home, layer warm clothing and get cosy with blankets rather than cranking up the heat.

How to Save on Hot Water

According to, water heating makes up 18% of the average home's energy use. Even if you live in an area that doesn't assess a fee for water usage, you still have to pay to heat it up. Here are some simple ways to scale back on hot water usage and save money:

  • Use cold water for laundry. Cold water can help prevent shrinking and fading of clothes and other items, and you'll avoid using extra energy to heat up the water. Also, washing full loads will help cut your energy and water usage.
  • Adjust the temperature on your water heater. Manufacturers typically advise setting your water heater temperature to 140 degrees—but reducing the temperature to 120 degrees is sufficient for most households, and reduces the chance of scalding. Lowering the temperature can also prolong the life of your water heater by reducing mineral buildup and corrosion.
  • Fix leaky faucets. A single drip per second accounts for 1,661 gallons of water and costs up to $35 per year, according to
  • Install reduced-flow fixtures. Simply buying new showerheads, which can cost as little as $10 to $20 each, could net you water savings of up to 60%.
  • Use hot water more efficiently. Avoid lengthy hot showers and only run the dishwasher when it's completely full.

Try to Negotiate Your Energy Bills

You may be able to negotiate your energy bill to save money depending on the state you live in and your utility provider.

Some states offer energy choice, allowing you to select from a list of electricity and natural gas providers. Research rates and contact the providers you're most interested in to inquire about introductory rates and other new-customer incentives. Let the customer service representative know you've done your homework by shopping competitors. Also, be open to speaking to several team members until you get the discounted rate you want.

If these tactics don't work, be willing to walk away. Communicate your intention to cancel your services and go with another energy provider. In most instances, the customer loyalty or retention department will get involved and offer incentives to keep you as a customer.

If your area does not offer you a choice of providers, try these tips for negotiating your energy bills:

  • Inquire about ways to lower your bill. This often works better than asking for a better price. The representative may offer a discount not advertised to the public.
  • Ask about customer loyalty programs. If you've been a customer for some time, the energy provider may have a small discount available to you.

It's also worthwhile to inquire about, paperless billing and autopay. If you sign up for these programs, you could get a discount on your monthly bill.

How Your Energy Bill Can Affect Your Credit Score

Lowering your energy bill can help free up funds that can be used to meet financial goals. Your energy bills could affect your credit health—both positively and negatively.

Utility accounts aren't automatically reported to the credit bureaus, but if you miss or fall behind on your payments, the utility provider could turn the account over to a collection agency. A collection account could end up on your credit report and hurt your credit.

Paying your energy bill on time every month can also mean good news for your credit score. With Experian Boost®ø, you can receive credit on your Experian credit report for timely utility, telecom and streaming service payments—which can help improve your credit scores. In fact, Experian Boost users whose scores go up see an average credit score increase of 13 points when adding these payments to their credit reports.