Why is my electric bill so high?

If you own a home, you've probably experienced the shock of opening your monthly electricity bill in your mailbox or email and seeing a higher dollar total than expected. It's a standard part of home ownership, and you can hear homeowners lamenting as electricity rates increase – "Why is my electric bill so high? Why does my power bill keep going up?"

Luckily, you can take steps to find the source of high electricity bills and resolve them to minimize the impact on your wallet. Here are some ideas to start the troubleshooting process, along with some suggestions on what to do about your high electric bill.

These are the top six most common reasons you might have a high electric bill:

1. You have older appliances

2. You're using your appliances in an inefficient way

3. You've been moved to a new rate structure, like time-of-use

4. Your utility rates are increasing overall

5. You continuously change or keep your thermostat set to extremely high or low temperatures

6. You're using inefficient heating and cooling systems

Importantly, for most U.S. households, electric bills are generally higher in the summer months, as that is when most air conditioners run for the most hours. However, if you notice your utility bills are higher than usual for the time of year (or compared to the previous month), you can probably take action and reduce your electricity demand.

Over time, the electronic appliances in your home degrade and lose efficiency. In addition, older appliances weren't made at the efficiency standards required today. Even in their prime, they will draw more electricity to generate the same amount of power that a comparable ENERGY STAR appliance today, which can lead to older appliances becoming relative "energy hogs" in your home.

Saving tip: Replace old appliances with ENERGY STAR appliances

If your house is full of older appliances, you may consider upgrading to newer technology to reduce your utility bill. Keep an eye out for ENERGY STAR appliances in the shopping process. This is particularly true if they're appliances like refrigerators, dryers, and dishwashers that use a lot of electricity to begin with. Upgrading to more efficient appliances in your home could lead to significant annual savings: ENERGY STAR reports that a typical household can save roughly $450 per year on energy bills by using products with their certification.

Many homeowners have high electricity bills because of the appliances plugged into their outlets, even if they aren't using them frequently. Many modern electronics continue to draw electricity from the grid, whether powered down or not. The easiest way to conceptually think about it is that these appliances are on "standby" until being turned on. These are sometimes referred to as "vampire appliances." In your own home, this may include DVR systems, garage door openers, smart home devices like the Amazon Echo, phone chargers, or your microwave.

While appliances on standby don't use as much electricity as when they're in use, they can still add up and contribute to an overall higher electricity bill. Appliances on standby account for roughly five to 10 percent of your home's energy usage, according to the U.S. Department of Energy, costing, on average, $100 per year. You'll notice that even if you spend a month away from home, you're likely to still have a decent-sized electricity bill because of some of these products.

Saving tip: Clean your appliances and fill your dishwasher, washing machine, and dryer to capacity

If your appliances haven't been cleaned in a while (especially your refrigerator and air conditioner), that might impact your electricity bill. Cleaning the condenser coils at the back of your fridge (if your model has them), in particular, is an easy way to keep it running at maximum efficiency. When it comes to air conditioners, make sure you've been changing the filter on your unit at least once a month. The more build-up of debris in your AC filter, the less efficient your system will run.

In addition, you can save extra money on your utility bill by running power-hungry appliances like dishwashers and washing machines at capacity. Try to wait to run your dishwasher until it's actually full so you're getting the most out of the wash cycle. The same goes for your clothes washer and dryer.

Saving tip: Use smart power strips and turn things off when leaving the room

Smart power strips, also known as advanced power strips, address the problem of phantom loads by shutting off the power, ultimately reducing overall electricity usage. Smart power strips can be set to turn off at an assigned time, during a period of inactivity, through remote switches, or based on the status of a "master" device.

Although it might seem obvious, another way to squeeze out more electricity savings is simply turning off devices like ceiling fans and lights when you leave a room. Especially for larger rooms, this can add up over time. If you really want to automate things, you can install motion sensor lights or set a schedule using an energy management system.

Have you recently opted into or been forced by the utility to adopt a time-of-use (TOU) plan? If so, this could be one reason your electricity bill is higher than in the past.

TOU rate plans charge different rates depending on the time of day you're drawing electricity from the grid. "Peak hours," or when the utility charges the most, are in the evening as most people return from work. It will increase your monthly bill if you're on a TOU plan and running electrical appliances during these hours. One common electric bill increase happened during the COVID-19 pandemic when more people were spending time at home during the day and working remotely. So while TOU rate plans can help you save money, if your energy usage doesn't align with the lower cost times, then you'll actually be paying more.

Saving tip: Adjust how you use energy at home

Even if you don't currently use much electricity during off-peak hours, do you have the flexibility to change your everyday habits and decrease your electricity use during peak hours? This might seem complicated for homeowners who leave the house every day for work and return in the evening when electricity rates will be higher, but there are still steps you can take to save money using time-of-use and schedule your energy usage outside of peak times. For example, many appliances – including dishwashers, washing machines, and dryers – have scheduling functions so that you can set the time for them to run ahead of time. If you own an electric car, you can also plan to charge it at night during off-peak hours to save money when charging your EV at home.

You can also wake up earlier to start household chores that require a good amount of electricity, wait to charge appliances until it's late at night, and generally try to be more conscious of your power usage. All these actions help minimize your use during peak hours and cut down on energy use.

The price of electricity fluctuates across the country, and residential electricity rates do typically increase over time. Energy costs are rising around the county for electricity and other heating energy like natural gas and oil. Even gas prices are on the rise when you fill up your vehicle's tank away from home. As the rate you pay for electricity continues to rise, it will mean higher electricity bills, even if you aren't using more electricity.

Below is data from a few states and utility companies showing what they've experienced regarding electricity price increases.

National Grid, PG&E, Duke Energy, and other top utility rate increases

Source: U.S. Energy Information Administration

This isn't to say that homeowners in all states have experienced an increase in electricity rates since last year. Most have, though, with only Montana being the only state where residents see lower rates in August 2022 than in August 2021. If you think an increase in utility costs may cause your high bill, it's worth looking at their information online or searching local news to see if this may be the case.

Saving tip: Offset your bill with solar

There are two main ways to use solar to save: installing solar panels or subscribing to a nearby community solar farm. The best way to save on your electric bill is to install solar on your property. Throughout your system's 30+ year lifetime, you'll save thousands of dollars in avoided electricity costs – and you can even start saving on day one with a $0-down financing.

If you're a renter or don't have a good roof for solar, you can also get a discount on electricity by subscribing to a community solar program. With community solar, you'll get credit for electricity from a local solar farm, usually at a lower rate than your utility. Electricity bill savings differ from program to program and also vary by month. On average, most community solar subscribers receive a discount of 5-10% off traditional electricity costs over a year.

Saving tip: Compare electricity plans in your area

You can also save on electricity costs by simply comparing electricity plans. For example, WattBuy offers an energy marketplace where you can compare your available electricity plans to maximize your savings (up to 40%!) and environmental benefits. So, while you may have limited (or just one) option for which utility you use to power your home, various plan options may be available.

Most experts recommend keeping your thermostat set at 68 degrees in winter and 78 degrees in winter for energy saving. Energy consumption increases if your heating and cooling system is constantly running, which is more likely with a higher temperature setting in winter or a lower temperature setting in summer.

Saving tip: Use a smart thermostat or energy management system to monitor and control your home's energy usage

Your HVAC system is usually a big part of your home power usage and uses much less energy when you aren't constantly changing the temperature. Many smart thermostats and energy management systems available today help you save energy and reduce utility bills by keeping temperatures set at a certain level and not constantly changing them so your HVAC system isn't running as much.

Heating and cooling your home can be expensive, especially with dealing with rising temperatures, winter storms, or other natural disasters and inclement weather. If your HVAC system is older, it's probably not running as efficiently as a newer system. Heat pumps are a technology that's been around for a while but have been growing in popularity and increasing in their technological advances, even heating homes efficiently in extremely cold weather. Heat pumps are available to provide hot water as well in the form of heat pump water heaters.

Saving tip: Install heat pumps to boost energy efficiency

Air source heat pumps are incredibly efficient ways to heat and cool your home with one HVAC system. While air conditioning systems are also usually pretty efficient, you'll still need a separate system, like a furnace, to heat your home. Unless you install heat pumps, that is! While your exact energy savings to heat your home will vary depending on which heating source you switch from (furnace, oil, or baseboard resistance heating), you can often save money with heat pumps on monthly utility bills. You may also have local heat pump incentives or rebates available through your state or utility company, so ask a trusted heat pump contractor what might be available.

Solar is a great way to use renewable energy to save on utility bills. The best way to save on your solar system (and ultimately your electric bill) is to compare quotes. On the EnergySage Marketplace, you'll receive up to seven quotes from our network of pre-vetted installers. Unable to install solar on your property? Check out our Community Solar Marketplace to see if there are any available projects located near you!

This article was originally published on January 15, 2022, and has been updated.