Why Is My Electric Bill So High, and How Do I Lower It?

There are few things as unpleasant as opening a utility bill and seeing charges that are significantly higher than you expected or budgeted for.

If you’ve recently gone through utility charges and are asking, “Why is my electric bill so high,” this guide will help you determine what’s causing a spike in your energy costs and provide tips on lowering your electric bills.

Reasons why your electric bill is high

There are quite a few things that could be causing a spike in your electric bills, so consider each of the following to find the culprit.

1. Electricity prices have increased

Electricity prices have increased 193% since 1990; between 2023 and 2024 alone, they went up nearly 4% throughout the United States. National electricity costs are currently higher than they've ever been.

Unfortunately, that means the reason behind your high electric bills could be unavoidable. Energy is getting more expensive as natural resources become more challenging to source, generation facilities become harder to build, and electricity usage skyrockets nationwide. 

While you may not be able to change your electric rate, you can reduce your energy usage to make your bills more affordable.

2. You got moved to a new electricity plan

If you live in a state where you can choose an electricity plan, your old plan may have expired, and your power company may have automatically opted you into a time-of-use (TOU) plan or a month-to-month plan, both of which can lead to a spike in monthly bills.

TOU plans have varying rates per kilowatt-hour (kWh) based on when you consume electricity, so the power you consume during certain times of the day may suddenly be more expensive. TOU energy is most expensive during "peak hours," which are typically between 3 pm and 7 pm on weekdays.

Month-to-month plans often have lower per-kWh prices than long-term fixed plans, but they also have fluctuating rates. In times of high demand, a variable-rate plan like this can leave you with an unexpectedly high electric bill.

3. You've seen unusually hot or cold temperatures in your area

Electricity prices fluctuate based on supply and demand, so if you've been experiencing unusually hot or cold weather in your area, demand for heating or cooling will spike, and electricity prices will tend to follow. 

Not only are prices going to increase, but extreme temperatures make your HVAC and heating systems work harder to maintain comfort in your living space, which means increased energy use, as well.

4. You have aging systems and appliances in your home

New, energy-saving appliances and home systems run more efficiently than old ones because they're made with efficiency in mind. Translation: that old refrigerator, dishwasher, or central AC system you have could be causing spikes in your electric bills. Upgrading to energy-efficient, ENERGY STAR-rated appliances and systems can help reduce monthly operating costs.

5. You're experiencing air leaks

According to the U.S. Department of Energy, 43% of the energy consumed in a home goes toward heating and cooling. That means inefficiencies in your HVAC system tend to run your electric bill up the most.

Air leaks can occur when weatherstripping and caulking seals around windows and doors fail over time, which speeds up how quickly your home loses conditioned air to the outside. As a result, your HVAC system works harder and consumes more electricity to keep up.

If you have a forced hot air heating system or a central air conditioning system, you can also experience leaks in your ductwork that allow conditioned air to escape into the voids behind your walls and don't contribute to temperature control in your living space. Your system then has to use more energy to compensate for the losses, leading to a higher rate of electricity usage. 

6. Your lifestyle changed

Finally, if you find yourself asking, "Why is my power bill so high?" the answer could be a change in your lifestyle. If a family member recently retired, returned from school, or started working from home, you now have someone using electricity during the day you didn't have prior. That change could lead to spikes in your electricity costs, especially if you're on a time-of-use plan and the added consumption is during peak hours.

7 ways you can lower your high electricity bills

Are you finding that you dread opening your power bill every month? You can do a few things to reduce your consumption and the cost you pay per kWh to save.

1. Upgrade old appliances and systems

If the appliances and systems in your home are nearing the end of their useful lives, replacing them can instantly have a positive impact on your electricity bills. Refrigerators, freezers, and clothes dryers are the appliances that use the most energy, so focus on those first and install new ones that are rated by ENERGY STAR. 

You can also upgrade your water heater and HVAC system to more modern and efficient options. Tankless water heaters and heat pumps are additional upgrades you can make that tend to be more efficient than traditional options. 

2. Adopt energy conservation habits

Changing your habits can be a simple way to reduce your electricity consumption. Even just turning your lights off when you leave the room can add up, especially with electricity rates on the rise! Try using natural light, open the windows to help cool off your space, unplug devices when you're not using them, and keep the temperature of your thermostat a few degrees higher or lower (depending on the season!) to help keep your bills lower.

3. Plan your electricity use carefully

If you’re enrolled in a TOU energy plan, you can make minor changes to how you use your appliances to reduce your monthly bills. Start by checking when your electric company charges the highest electric rates; it’s usually from the late afternoon through the evening. 

Once you know when electricity is the most expensive, plan your consumption around that. Here are a few tips:

• Run your clothes dryer overnight or in the early morning

• Set your thermostat at a more moderate temperature during peak hours

• Rely on secondary heating sources like wood-burning stoves during peak times

• Charge your electric vehicle (EV) overnight rather than when you get home from work

4. Consider switching providers or choosing a new energy plan

If you live in a state with a deregulated energy market, you can shop around for a more affordable energy plan or switch to a new retail electricity provider (REP) with lower electricity rates. Some companies offer low introductory rates only, so pay close attention to how your rate can change over time.

Your best bet for avoiding unexpectedly high electric bills is to choose a fixed-rate plan to avoid surprise charges during demand spikes and prioritize plans with a low per-kWh cost. You can also shop for plans that include free electricity or reduced rates for nights and weekends, which can save quite a lot of money, depending on your lifestyle. These can be particularly useful for savings if you have an EV that you typically charge overnight.

5. Install a smart thermostat

Since just under half of your home’s energy consumption goes toward heating and cooling, installing a smart thermostat can be a great way to bring down your monthly bills. Set your temperature five to 10 degrees lower when no one is home, and program it to bring the temperature back up at the end of the work day for comfort.

Many utility companies also offer rebates for installing smart thermostats, so this could be a very affordable or even free way to improve your home’s energy efficiency.

6. Complete an energy audit

Finally, you can hire a professional to complete an energy audit to identify areas in your specific home that are leading to high electric bills. They can point out air leaks, identify spaces where replacing insulation will increase comfort and reduce energy consumption, and make specific recommendations for upgrading appliances, light bulbs, home systems, windows, and doors to maximize your monthly savings.

Energy audits can be a little on the expensive side, especially when you consider the cost of carrying out the recommended repairs and upgrades. However, they can quickly pay for themselves by reducing your energy bills, and they can even extend the life of your HVAC system by reducing strain on the components.

7. Switch to solar

Going solar is one of the best ways to reduce your electric bill, and if you have a reliable, professional design and install your system, you could come close to eliminating your monthly bills altogether. Solar installation comes at a significant upfront cost, but most solar systems end up paying for themselves and then some through electricity bill savings.

Solar will be a particularly worthwhile investment for homeowners who also invest in on-site home storage or live in areas with good net metering programs. These will allow for “around-the-clock” savings even when the sun isn’t shining.