How to Save Money on Your Electric Bill

Electricity comes at no small cost for consumers. In fact, the typical family spends more than $2,000 per year on utilities, according to the federal government's Energy Star program—that's more than $167 a month. The good news is that your electric bill is not immutable. You can become a more energy-efficient household and, thereby, lower costs by contacting your electric company to see what they offer for payment programs. "Reducing an electricity bill isn't impossible. Because so much of what we purchase and use seems to have an electric component, it might seem daunting," says Manuel Schönfeld, founder and CEO of PowerX.

Here, follow advice from our expert by making small changes in order to save money on your upcoming bill.

Conduct an audit.

As a first step, call in an expert from your local electric company—many companies offer this service for free. "Learning to understand your utility bill is going to vary based on the information provided," explains Schönfeld. The auditor will test your heating and cooling equipment, inspect your home for air leaks, check the quality of your insulation, and then offer their best recommendation for adjustments.

Look for "vampire power" drain.

To address these issues, it helps to know how to read your bill in the details. "Most bills (regardless of energy provider) will include the unit of measurement for the utility, whether it's electricity, water, or natural gas. Customers might see terms like CCF (for water or natural gas) or kWh, or kilowatt hours, for electricity," Schönfeld says. "A kilowatt-hour is a measure of energy usage. It's based off of a 1,000 watt appliance running for one hour. For example, a 10-watt LED bulb would take 100 hours to use 1 kWh." In reading your bill, check for phantom energy, which is what happens when appliances use up energy even after they're turned off. This adds up: phantom energy costs the average family up to $100 per year on their electric bill, according to the Department of Energy. To offset it, use a smart power strip, which cuts off the current when the devices aren't in use.

Swap out your lighting and main lines.

This seems like a given but start by swapping out standard light bulbs for LED ones, Schönfeld recommends, and install dimmer switches. "There are definitely some commonalities across main line items that contribute to usage. For example, for most of us, the largest line items are heating and cooling," he says. "An air conditioner can account for 20 to 40 percent of your bill. Water heating makes up another 10 to 20 percent, and appliances, lighting, and electronics also factor in." Tools like PowerX can help you to understand your energy usage and identify ways that you can save.

Program your thermostat.

You can turn down your thermostat in winter. "While it might feel good to enjoy mid-70 degree temperatures in the winter, it takes a lot of energy to keep things toasty. You might not notice a couple degree change, but your bill sure will," he says. Washing your clothes in cold water can also make a difference on your energy bill. Other small steps you can take include changing air filters so that these systems can circulate clean air throughout the home more easily.

Upgrade to energy-efficient appliances.

This may seem like an added cost, but the investment will save you money in the longterm. "Buy energy efficient appliances. If your appliance is aging, odds are it's costing you money on your bill," says Schönfeld. "Where you can, consider upgrading common appliances including refrigerators, washing machines and microwaves to high-efficiency models."

Ask your provider for personalized advice.

And if all else fails, "consider switching energy providers," as Schönfeld suggests. "While this might not be an option for some, taking the time to shop around for the best energy rates might be worth the call." You can also call your current provider to find out when the peak times occur and modify your habits around that. And using apps that track energy efficiency and give you energy-saving tips can provide further insight into your daily habits.