How much does electricity cost in 2026?

Electricity prices are always changing, impacted by seasonal variations, market shifts, and policy changes. As of August 2026, the average cost of electricity in the U.S. is around 19 cents per kilowatt-hour (kWh).

If your rate seems way off average, know that electricity prices vary widely throughout the country. We’re breaking down electricity costs by state to help you better understand your expenses.

Retail electricity prices have increased faster than the rate of inflation since 2022, and the trend shows no signs of reversing. Several forces are driving costs higher:

The Iran war and global energy markets 

The ongoing conflict in Iran has disrupted oil and gas supplies at the Strait of Hormuz, through which around 25% of the world's oil trade passes. While the U.S. generates most of its electricity onshore, the disruption has tightened global natural gas markets and put upward pressure on U.S. energy costs. The conflict is accelerating U.S. natural gas exports to record levels, shrinking domestic supply, and driving up costs for American households.

AI and data center demand 

Electric rates went up 7.1% in 2025 and are expected to continue rising in 2026, with some regions seeing annual increases of more than 25%—driven in part by the energy-intensive development of AI data centers. Analysis suggests that data center growth could drive up electricity prices by as much as 25% in some U.S. markets by 2030—about $70 more per month for the average household.

Natural gas prices and grid investment

About 40% of U.S. electricity comes from natural gas, which means rising gas prices hit your electric bill whether you heat with gas or not. The EIA forecasts natural gas prices to nearly double between 2024 and 2026, and utilities are passing that cost directly to customers—on top of ongoing grid upgrade costs, rising energy demand, and volatile fuel prices that are increasing electricity costs faster than many households can keep up with.

Residential electricity costs an average of $0.19 per kWh in the U.S., but what you pay for your power depends on where you live. For example, electricity can cost New Englanders twice as much per kWh as it does in the Midwest.

Cost of electricity by state

Electricity rates are based on EnergySage Marketplace data—not every state in the U.S. is represented.

Power plants come in all shapes, sizes, and sources; some are better for the environment than others. Fossil fuels still generate most of the grid’s electricity, but renewables like solar and wind are capturing more and more of the U.S. energy mix thanks to things like renewable portfolio standards (RPS). 

Below are a few resources that can help you better understand where your electricity comes from, but you can also reach out to your utility company directly:

• U.S. Energy Information Administration (EIA) tools and resources

• Environmental Protection Agency (EPA) Power Profiler

• The American Cities Climate Challenge Renewables Accelerator tool

You likely use more electricity during certain seasons than others, especially if you live in a state with clearly defined seasons or frequent extreme weather. For example, heat waves often cause spikes in electricity prices because everyone is cranking up their air conditioning at the same time. Like any other product, energy prices usually increase when demand is high.

There are two main ways to save on electric bills: use less electricity or offset your costs. 

Improve your home’s energy efficiency

Using less electricity is the simplest way to save on your electricity bills. You can make small habit changes to use less energy, like hanging your clothes to dry or only running the dishwasher when it’s filled to the brim. But if you live in a household with multiple people, that’s much easier said than done. A major way to save on energy is to upgrade to energy-efficient appliances.

Go solar (any way you can)

Going solar is one of the most effective ways to reduce or eliminate your electric bills. Installing rooftop solar panels will bring the greatest savings by allowing you to generate your own electricity. It can be a big expense, but the average homeowner pays off their system in 7.1 years and then can enjoy paying little to nothing for electricity for the rest of the lifetime of their panels (about 30 years).

If you can’t install rooftop solar or simply don’t want to, consider subscribing to a local community solar project. Community solar allows you to enjoy the financial and environmental benefits of solar (though on a smaller scale than rooftop solar) without a large upfront investment.