How to Slash Your Electric Bill by $1,500 a Year in 3 Simple Steps

how to lower your electric bill
Kate Ter Haar under Creative Commons

When you’re looking for ways to lower your electric bill, you’ll see a lot of products promising huge savings.

But there’s a catch: Many of those numbers reflect other savings, like public health benefits, societal improvements and environmental impacts. Those huge savings you see aren’t actually the ones reflected on your bill.

I work in energy efficiency with responsibilities in oversight, auditing, savings calculations and cost benefit analysis on a daily basis. While this advice is independent of my work, I’ve seen that most experts don’t agree on what savings you can actually achieve in your home.

For example, in study after study, residential programmable thermostats haven’t actually lived up to their promised savings. This is partly because people were already using their manual thermostats in energy-saving ways — and partly because many people don’t know how to properly use them!

So what can you do for little or no cost to actually reduce your electric bill? Here’s a beginner’s list of convenient options that will help you make a big dent in your bills.

1. Call Your Utility Company

Ask, and thou shalt (probably) receive.

This might seem like an odd way to reduce your bill, but in many states it’s the cheapest and most effective place to start.

Most American utility companies are required by law to operate “Energy  Efficiency” or “Energy Smart” programs, which your bills help fund. Ask about your utility company’s programs, how to take advantage of them and what you need to do to cash in.

For example, some states run direct load control programs, where you let the utility company turn off your air conditioner, water heater or other appliance for 15 minutes or so during peak usage times. Most experts agree the majority of customers don’t notice a difference in their service; I don’t.

In return, you get a credit on your bill, which can range from $147 per year at Duke in Florida and Florida Power and Light, to $5 a month at Idaho Power. Plus, you’re not paying for the power you would have used during that time.

2. Pull the Plug on Vampires

This is one of the simplest ways to save money, literally overnight.

Just by being plugged in when you’re not using it, your DVR costs you $43.46 a year, or $3.62 a month, according to the Department of Energy. Chargers run 0.26 watts when not in use, and 2.24 watts when plugged into a fully charged cell phone. Your Xbox and TV run 0.15 kWh an hour each, estimates Duke Energy.

So what do you do about it?

Unplug chargers from the wall when you’re not using them and from fully charged phones. Leaving a charger in the wall while you’re at work for nine hours costs you 10 cents a day. In the average household with 25 devices, including Kindles, iPads, rechargeable flashlights, cell phones, laptops and MP3 players, that’s $2.50 a day or $935 a year (plus tax, in most states) for energy you don’t need.

If you have a DVR, which most of us do, you probably have a predictable pattern of when you use it. You don’t need a fancy app and custom-built wireless controlled outlets. Just hunt down your Christmas light timer and set it to power on your DVR an hour before you anticipate you’ll be there to use it, which gives it enough time to warm up.

Even stay-at-home family members can’t watch TV in their sleep, so you’re bound to have times you can turn off your DVR. If you have two, you’ve just saved yourself $87 a year.

3. Change Your Light Bulbs, Eventually

Conventional wisdom says always change your light bulb to the most efficient product available. But you’re not conventional, you’re a Penny Hoarder.

The fact is, many LED bulbs on the market over the last few years didn’t work as well as conventional bulbs, overstated savings, were expensive and came with heavy instructions and warnings. With statements like “lasts 20 years” on the package, it’s easy not to trust them. That number is based on three hours of use per day, which is unrealistic for many people.

For better options, talk to your utility company. Ask if they have home audit programs, energy-saving kits or subsidized light buying programs.

In some states, home auditors will give you all kinds of goodies to save energy, especially light bulbs to replace incandescent and halogen ones. You’ve already paid for new bulbs through your bill, so you might as well get them. If you have to buy additional bulbs, ask if the utility company subsidizes efficient light bulbs at any local retailers.

Outdoor and yard lights should be your first targets. Many homes have lamp posts in the front yard and garage lights that turn on when it gets dark and stay on all night, making them the most-used lights in most homes — and they’ll cost you.

A 100-watt incandescent bulb on for 10 hours equals 1 kWh. At the average rate in the United States, that’s 12 cents per night, per bulb, or $44 a year. An equivalent “brightness” CFL uses 16 watts and would cost you two cents a night or $7 a year.

Each of these outdoor incandescent bulbs you replace with a CFL will save you $37 a year, or just over $3 per month. CFL bulbs last much longer than incandescents, so you’ll also save the time you would have spent changing bulbs.

Indoor lights are on less, can be more annoying with CFL warm-up time and will save you less per bulb in a given year. They’re still worth changing out, but you may want to consider using LED light bulbs instead.

LEDs or CFLs?

Most LEDs on the market are expensive, at least today. The price is falling fast, down by half in the last 12 months by some estimates, and soon these bulbs will be the most cost-effective replacements for incandescent bulbs, even in the short term. Walmart’s store-brand LEDs retail for as little as $3 each. They aren’t Energy Star-rated yet, but they get the job done, and 8.5 watts is a lot less than 60 watts.

Note that the base of many LED bulbs gets very hot. Many LED bulbs say, buried in the manual or in small packaging print, not to use them in enclosed fixtures. The heat damages the bulb and can actually cause the light to stay on after you turn it off. The only thing worse than paying $3-$15 per light bulb is breaking it.

For now, CFLs are still cheaper and save almost as much energy as LEDs. A 60-watt equivalent CFL uses 13 watts; the “same” LED uses 10 watts. If you can deal with the warm-up time and various other complaints about CFLs, they’re still your better option based on cost. Wait until they burn out before changing to LEDs. More than likely, this will also buy time for the LED price to come down further.

Not interested in CFLs and their warm-up time or the apparent “brightness” and cost of these newfangled LEDs, but still want to save money? Replace your old bulbs with one of the new incandescent bulbs. All new bulbs must be about 30% better than their predecessors, according to federal standards. Most 100-watt bulbs sold today actually use around 72 watts.

They’re a great option for lights you don’t use often, or that go on and off fairly quickly, like those in closets and half bathrooms. CFLs don’t like quick on/off situations, and you’re not going to save much with an LED if the light is only on for 60 seconds at a time.

Want to calculate your own savings? Look for national prices here and rough lumen or brightness watt equivalents here. Here’s your formula for how much a bulb will cost to operate:

((Watts x hours per day) /1000) x price x 365 days

From the above CFL example using average national prices, ((16 watts x 10 hours) /1000) x $0.12 x 365 = $7.01. Compare that to the incandescent average of $44 per year for an outdoor bulb, and you’ve saved about $37.

Here’s What These Changes Mean for Your Electric Bill

So you’ve changed 30 light bulbs around your house to CFLs or LEDs, unplugged your chargers, set two DVRs with timers, and enrolled in a $75-a-year load management program from your utility company.

On average, you just saved yourself $1,500 a year in utility bills and taxes. That’s $118 a month at average U.S. utility rates in the winter, and $143 with load management credits in the summer. Not to mention any other swag or savings from your utility company’s programs. The best part is most of these savings happened without you changing your daily life drastically or installing solar panels.

Your Turn: Have you tried any of these tactics? What difference did they make to your electric bill?

Cade Simmons works in energy efficiency oversight and has a master’s degree in economics specializing in public utility regulation from New Mexico State University.