3 Ways to Lower Your Electric Bill in 2026: Energy Savings Tips That Could Save You Hundreds
Energy costs have risen significantly over the past few years, putting additional pressure on household budgets already strained by inflation, higher grocery prices, insurance costs, and property taxes. If you've opened your electric bill recently and experienced sticker shock, you're certainly not alone.
For many homeowners, summer is when energy bills reach their highest levels due to increased air conditioning use, pool equipment, and other seasonal energy demands. Fortunately, there are several simple steps you can take to reduce your energy expenses without sacrificing comfort.
In this article, we'll discuss three practical strategies that could potentially save you hundreds—or even thousands—of dollars per year on your energy costs.
Why Have Energy Bills Increased?
One of the primary drivers behind rising electricity costs has been the increase in natural gas prices. Since natural gas is used to generate a large portion of electricity throughout much of the United States, increases in natural gas prices often lead directly to higher electric bills.
For homeowners in states such as Connecticut, where electricity generation relies heavily on natural gas, these increases have been particularly noticeable. Combined with summer cooling demands, many families find themselves facing significantly higher utility bills than they anticipated.
Tip #1: Shop Around for a Lower Electricity Supplier Rate
Many consumers don't realize they may have the ability to choose their electricity supplier.
In deregulated energy markets, your electric bill generally consists of two components:
1. Supply Charges
This is the cost of generating the electricity.
2. Delivery Charges
This is the cost of transmitting electricity to your home through existing infrastructure.
While you typically cannot change the delivery portion of your bill, you may be able to lower your supply rate by selecting a different energy supplier.
States With Deregulated Energy Markets
Many states offer some form of energy choice, including:
Connecticut
Massachusetts
New York
Pennsylvania
Illinois
Ohio
New Jersey
Maryland
Texas
If you live in one of these states, it's worth investigating whether lower supplier rates are available.
Connecticut Example
For Connecticut residents, the state's energy marketplace allows consumers to compare supplier rates and choose the option that best fits their needs.
Potential benefits include:
Lower per-kilowatt-hour rates
Fixed-rate contracts
Short-term promotional pricing
Long-term protection against future rate increases
Even a difference of just a few cents per kilowatt-hour can produce meaningful savings.
Example Savings
Assume:
Current rate: 13.7¢ per kWh
Alternative rate: 10.7¢ per kWh
Monthly usage: 1,000 kWh
Savings:
3¢ × 1,000 kWh = $30 per month
That's:
$360 per year
Households with higher energy usage could save substantially more.
Important Considerations
Before switching suppliers:
Review contract terms carefully.
Understand whether the rate is fixed or variable.
Mark your calendar before promotional rates expire.
Compare renewal rates before automatically renewing.
Many suppliers no longer charge cancellation fees, but it's always wise to verify before enrolling.
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Tip #2: Schedule a Home Energy Audit
One of the most effective ways to lower your energy costs is to identify where your home may be wasting energy.
A home energy audit provides a professional assessment of your home's energy efficiency and can uncover issues such as:
Air leaks around windows and doors
Poor insulation
Inefficient appliances
Drafty attics or basements
Inefficient heating and cooling systems
Many homeowners are surprised by how much energy is lost through relatively minor issues.
Common Improvements Recommended During Energy Audits
An auditor may recommend:
Additional insulation
Weather stripping
Air sealing
Ductwork improvements
Appliance upgrades
HVAC efficiency improvements
Some utility-sponsored programs even install certain energy-saving measures during the audit itself.
Potential Savings
According to various energy-efficiency studies, homeowners can often reduce their annual energy consumption by 10% to 30% through targeted improvements.
Depending on your current energy usage, that could translate into:
Hundreds of dollars annually
Lower heating costs
Lower cooling costs
Improved comfort throughout the year
In some areas, energy audits are heavily subsidized by utility companies, making them one of the highest-return investments homeowners can make.
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Tip #3: Install a Smart Thermostat
A smart thermostat is one of the easiest ways to reduce energy consumption without significantly changing your lifestyle.
Unlike traditional thermostats, smart thermostats allow you to:
Program temperature schedules
Adjust settings remotely from your phone
Automatically reduce heating or cooling when you're away
Monitor energy usage
Receive maintenance alerts
Why Smart Thermostats Work
Many households waste energy heating or cooling empty homes.
For example:
If you leave for work at 8:00 a.m. and return at 5:00 p.m., there's little reason to maintain the same indoor temperature all day.
A smart thermostat can automatically:
During Summer
Raise temperatures while you're away
Begin cooling shortly before you return home
During Winter
Lower temperatures while you're away
Warm the home before you arrive
This simple adjustment can significantly reduce HVAC operating costs.
Additional Convenience
One feature many homeowners appreciate is remote access.
Imagine leaving for vacation and realizing you've forgotten to adjust the thermostat. With a smart thermostat, you can make changes from anywhere using your smartphone.
This convenience helps prevent costly energy waste and provides peace of mind.
How Much Could You Save?
The actual savings will vary depending on:
Your home's size
Local energy prices
Current energy efficiency
HVAC usage
Family habits
However, combining all three strategies could potentially save:
StrategyPotential Annual SavingsLower supplier rate$200–$700+Home energy audit improvements$100–$1,000+Smart thermostat$50–$300+Total Potential SavingsHundreds to thousands annually
Final Thoughts
Energy prices may be outside of your control, but your energy strategy isn't.
If you're looking for ways to reduce monthly expenses and free up additional cash flow, consider:
Shopping for a lower electricity supplier rate.
Scheduling a home energy audit.
Installing a smart thermostat.
These simple changes can potentially save hundreds of dollars per year while making your home more comfortable and energy efficient.
The money saved can be redirected toward other financial goals, whether that's paying down debt, increasing retirement savings, building an emergency fund, or simply creating more flexibility in your budget.
As always have a wonderful day,
a better weekend,
and I look forward to writing to you next Friday!
Written by Ryan Morrissey CFP®, CLU®, CHFC®, CMFC
Founder & Principal Advisor of Morrissey Wealth Management
Host of the Retire with Ryan Podcast