How to lower your electric bill: what works in American homes in 2026

An average American home uses around 10,800 kWh of electricity a year, the EIA says, which is about 900 kWh a month. At July 2026’s national residential average of 18.31¢/kWh that is roughly $165 a month before gas or heating oil. In New York or Massachusetts, where the average was close to 30¢, the same usage costs about $270. Start with the rate if your state lets you shop for it, then go after the big loads: cooling, heating and hot water.

Shop for the rate, if your state allows it

If you live in Texas, Pennsylvania, Ohio, Illinois, New York, New Jersey, Maryland, Delaware, Washington DC, Massachusetts, Connecticut, Rhode Island, New Hampshire or Maine, you can shop for the supply part of your bill (Michigan has a small capped program). Everywhere else the utility sets the rate, so skip to the next section: the rest of this guide works in every state. Compare your current rate with fixed offers on the state site or through our comparison page. A cent or two per kWh on 10,000 kWh a year is $100 to $200. Our switching guide covers cancel windows and exit fees.

Set the thermostat and leave it

Every degree matters most in the long Texas and Mid-Atlantic summers. Set cooling a few degrees higher when you are out or asleep and let a programmable or smart thermostat do it for you. In winter, do the reverse. Constant manual changes, especially cranking the setting far down to “cool faster”, only make the system run longer.

Service the AC before summer

Change the filter every one to three months during heavy use, clear leaves and grass away from the outdoor unit, and have refrigerant and airflow checked every couple of years. A clogged filter makes the blower work harder for less cold air.

Seal the leaks you can see

Gaps around attic hatches, recessed lights, plumbing holes and window frames leak conditioned air in both seasons. Caulk and weatherstripping are cheap weekend jobs. Attic insulation is the next step up, and in older Northeastern homes it often pays back faster than new windows.

Replace an old electric water heater with a heat pump model

ENERGY STAR estimates a heat pump water heater saves a four-person household about $550 a year compared with a standard electric tank, more than $5,610 over its life, and pays for itself in roughly 2.7 years. If your tank is over ten years old, plan the replacement before it fails and you are forced to take whatever the plumber has on the truck.

Time-of-use plans: good for some homes, costly for others

Many utilities and Texas retail providers sell plans with cheaper nights or weekends. They pay off when you can move laundry, the dishwasher, pool pumps and EV charging out of the late-afternoon peak. They can cost more if your AC does most of its work at 5 pm. Read the plan’s hours and compare with how you actually live. Our appliance calculator helps you see which loads are worth moving.

Go easy on grid alert days

When the grid is tight, prices in wholesale markets spike, and some retail plans pass that through. PJM, the grid operator for much of the Mid-Atlantic and Ohio, issued a maximum generation alert for September 17, 2026 because of unusually warm weather and heavy maintenance outages. On such days, pre-cool the house in the morning and hold off on the dryer until evening.

Ceiling fans, used properly

Fans cool people, not rooms. Run them only when someone is in the room, counterclockwise in summer, and they let you set the thermostat a little higher without feeling it.

Keep the afternoon sun out

West-facing windows in Texas or Arizona can undo a lot of AC work. Blinds, exterior shades or reflective film on the worst windows cut afternoon heat gain.

The fridge in the garage

A second fridge or chest freezer in a hot garage runs hard all summer. If it is mostly empty, unplug it. If you need it, a newer ENERGY STAR model uses far less than a 20-year-old one.

Laundry: wash cold, clean the lint filter

Most of a washer’s energy goes into heating water. Cold cycles handle normal loads. Clean the dryer lint filter every time and the vent once a year, which also lowers fire risk.

Standby loads

Game consoles, cable boxes and old stereo gear draw power all day. Put entertainment equipment on a switched power strip and turn off the console’s “instant on” mode.

Heat pumps for heating, if you are replacing anyway

In the Northeast many homes still burn oil or propane, or use electric baseboard heat. A modern cold-climate heat pump heats and cools, and uses far less electricity than resistance heat. Note that the federal 25C credit for heat pumps and insulation ended for anything placed in service after December 31, 2025. State programs and utility rebates still run in several states, so ask your utility before you get quotes. Our heat pump calculator gives a first estimate.

Help if the bill is out of reach

LIHEAP, the federal Low Income Home Energy Assistance Program, helps pay heating and cooling bills through state agencies. The Weatherization Assistance Program funds insulation and air sealing for low-income homes; the DOE says households save $372 or more a year on average. Most utilities also offer budget billing, which spreads winter and summer peaks evenly over the year. It does not lower the total, but it avoids a shock in August.

What not to bother with

Unplugging phone chargers saves almost nothing. “Energy saving boxes” sold online that plug into an outlet do not work. And do not sign a supply contract at the door because someone promises savings you cannot check.

Know when prices change

In Illinois, ComEd’s supply price drops from 10.399¢ to 10.103¢/kWh on October 1, 2026 and Ameren’s from 11.326¢ to 10.441¢ for the first 800 kWh. In New Jersey, default supply rates reset each June 1 after the February auction, and other states have their own calendars. If you want a nudge before your own contract ends, set a free contract alert, and when that date comes, compare again.