13 Simple Ways to Lower Your Electric Bill

Updated on July 22, 2009.

Forgoing the family road trip for a homebound vacation may not save you the money you'd hoped if it means running the AC full blast all summer.

Even with oil and other commodity prices dropping because of the recession, average residential electricity prices are expected to rise 4.7% this year compared to last year, and another 3.3% next year, according to the Energy Information Administration's Short-Term Energy Outlook. Reducing your home electricity use can save you money and shrink your carbon footprint. The typical home releases about twice the carbon dioxide every year that the typical car does, according to the Alliance to Save Energy.

Here's how to prevent your electricity bills from escalating even as prices climb.

Arrange an HVAC inspection. Hire a certified technician to check that your heating, ventilation and air-conditioning system is operating at peak efficiency. Leaking ducts, for example, could reduce the unit's energy efficiency by as much as 20%, says Ronnie Kweller, a spokeswoman for the Alliance to Save Energy. An inspection will usually set you back $50 to $100, but that could be offset by the energy savings you'll reap over time. Plus, if you schedule your appointment before contractors are swamped with repair requests, you could snag a 10% early bird discount.

Shop for size. If you're in the market for a new room air conditioner, use Energy Star guidelines to assess how powerful a unit you need. A too-powerful unit not only wastes energy, it is actually less effective at removing humidity.

Keep it clean. Whether you have central air or an individual window or wall unit, be sure to clean the air filters every month. Dirt and dust hinder air flow, reducing efficiency.

Program your thermostat. Programming your thermostat to give your air conditioner a break for the eight hours you're at work could save you about $180 a year, according to EnergyStar.gov guidelines.

Seek out incentives on appliances. Energy Star-certified products are not only guaranteed to be more efficient than their conventional counterparts, but they also can cost less. And this year's economic stimulus bill included increased tax credits for energy-efficient home improvements. Qualifying central air conditioners are eligible for a tax credit of 30% of the cost, including installation, up to a total of $1,500 for all improvements combined. Many states offer additional incentives, so check the Database of State Incentives for Renewables and Efficiency to find out about local initiatives. Some utilities offer rebates on energy-efficient purchases. Austin Energy in Texas, for example, offers rebates of up to 20% with a maximum of $1,575 on certain energy-efficient improvements, including air conditioners.

Seal up your home. Pricey cooled air can leak through cracks along window and door frames. Invest in some caulk and weather-stripping to plug up these drafts as you notice them. Stopping those leaks and making sure your home is properly insulated could save you up to 20%, Kweller says. Insulation materials are also eligible for the 30% energy efficiency federal tax credit, up to $1,500 for all improvements combined.

Change your light bulbs. If you haven't swapped your incandescent bulbs for compact fluorescents yet, get to it, Kweller says. Switching four 75-watt incandescent for 19-watt CFLs can save almost $30 a year -- and not only do CFLs use less energy than conventional bulbs, but they also generate less heat.

Close your blinds. It's a simple concept: Rooms get hotter without shades or curtains to block the sunlight. You can put this idea to work more effectively by getting insulated window treatments.

Use fans. A breeze makes the room feel a few degrees cooler. Just be sure to turn it off when you leave. "Fans cool people, not rooms," Kweller says.

Unplug. Gadgets like your cellphone charger and microwave suck energy -- and generate heat -- as long as they're attached to a power source. Standby power for appliances not in use is typically 5% to 10% of residential electricity use, according to the Lawrence Berkeley National Laboratory. Plug those devices into a power strip that can be turned off when not in use. (For more tips, see our story 4 Ways to Reduce a Gadget's Power Drain.)

Check alternate suppliers. If you live in a state where the electric industry is deregulated, shop around for a different energy provider, says Steve Rosenstock, manager of energy solutions for the Edison Electric Institute, an industry group. Depending on where you live, you could save 5% to 15% a month, and many of these companies use renewable energy so they are much less dependent on the whims of oil, coal and natural gas prices. Most will also fix billing rates for a year or more -- a bonus if energy prices creep back up. Visit your state's public service commission to determine your options. Just be aware that most providers require you to commit to at least a year and charge a hefty fee if you duck out early, Rosenstock says.

Consider time-of-use plans. A growing number of electric companies are offering so-called time-of-use plans, which offer lower rates for energy consumption during off-peak hours (usually from midevening to early morning). The catch? You'll often pay more for peak-hours use, so consider your schedule before signing up. Arizona-based SRP, for example, regularly charges 10.73 cents per kilowatt hour during the summer. On the time-of-use plan, it charges 20.03 cents for on-peak hours (1 p.m. to 8 p.m. weekdays) and 6.30 cents during the rest of the day.

Fix your bill. Ask your utility about fixed-bill plans, which charge the same amount every month for a set period, regardless of your electricity use. You'll pay a premium rate per kilowatt hour to hedge against price increases and seasonal spikes, so make sure to crunch the numbers to see if you'll really save, Kweller says. Also, keep in mind that these plans periodically reconcile, which can leave you with a big bill if you've used more than the supplier anticipated. Check with your utility to see if you'll be alerted if you're using more power than anticipated and whether you can pay extra as you go.

Correction: A previous version of this story cited a spokeswoman for the Alliance to Save Energy as having said proper insulation could save a homeowner more than 20% on heating and cooling costs. The spokeswoman said proper insulation could save a homeowner up to 20%.