Start With the Biggest Energy Users
Heating and cooling consume 40 to 50 percent of the average home's electricity. Setting your thermostat to 78 degrees in summer and 68 degrees in winter saves roughly 2 to 3 percent on your bill for each degree of adjustment. A programmable or smart thermostat automates these setbacks during sleeping and working hours, saving a typical household $50 to $150 per year with no manual effort.
Your water heater is the second-largest energy consumer at roughly 18 percent of home energy use. Lowering the thermostat from 140 to 120 degrees Fahrenheit saves 6 to 10 percent on water heating costs while still providing comfortable hot water. Insulating the hot water tank and the first six feet of pipes adds another 7 to 16 percent in savings for a one-time investment of $20 to $40.
Eliminate Phantom Loads
Electronics and appliances draw power even when turned off or in standby mode. A television, cable box, gaming console, and sound bar together can draw 50 to 100 watts continuously while "off." Across all devices, phantom loads typically cost $100 to $200 per year. Smart power strips that cut power completely when devices are not in use eliminate this waste with no inconvenience.
Upgrade Lighting
If you still have any incandescent or CFL bulbs, replacing them with LEDs is the highest-return energy investment you can make. A 10-watt LED produces the same light as a 60-watt incandescent while lasting 15 to 25 times longer. Replacing 30 bulbs in a typical home saves approximately $100 to $150 per year. LED bulbs have dropped to $1 to $3 each, making the payback period less than three months.
Optimize Your Appliance Usage
Run your dishwasher and washing machine only with full loads. Use cold water for laundry — modern detergents work effectively in cold water, and heating water accounts for 90 percent of the energy a washing machine uses. Air-dry clothes when possible rather than using the dryer. Clean your dryer's lint filter after every load to maintain efficiency.
Seal Air Leaks
Air leaks around doors, windows, electrical outlets, and plumbing penetrations can increase your heating and cooling costs by 15 to 30 percent. Weatherstripping doors and windows costs $20 to $50 in materials and takes a weekend afternoon. Caulking gaps around outlets, pipes, and exterior penetrations costs another $10 to $20. These are among the highest-return home improvements available.
Check Your Rate Plan
Many utilities offer multiple rate plans, and you may not be on the most advantageous one. Time-of-use plans reward shifting energy-intensive activities to off-peak hours. Tiered plans charge more as your usage increases, rewarding conservation. Contact your utility or check their website to compare available plans. Use our electricity cost calculator to estimate how different rate plans affect your bill.