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How to REALLY Cut Your Electric Bill In Half – Seriously!

How to REALLY Cut Your Electric Bill In Half – Seriously!

If you really want to cut your electric bill by 50%, there are some very specific strategies that you can use to do just that. The key is in evaluating your usage, implementing simple energy-saving solutions, and pursuing energy-efficient improvements that will have a positive return on investment.

Here’s the steps to REALLY cutting your electric bill in half:

  1. Establish Your Baseline – what do you spend per month now?
  2. Immediately Adjust Your Usage Patterns
  3. Conduct a home efficiency audit
  4. Determine Your Energy Saving “Sweet Spots
  5. Evaluate Savings
  6. Advance Your Savings By Focusing On Energy Efficiency Home Improvements
  7. Re-Evaluate Savings
  8. Determine Return On Investment For High Ticket Energy Saving Investments
  9. Establish an Investment Plan For Large Purchase, large Return-On-Investment Items

Step 1 – Establish Your Baseline Energy Costs

The first thing we need to do is to establish how much you currently spend each month on your electric bill. Understanding that seasons impact energy use, it’s important to look at more than just a single month. If you have receipts filed, take a look back at the past 12 months so that you can see what the average usage and cost is per month.

Write these down by month or put them on a spreadsheet. This is the baseline energy costs that we will be working against.

Step 2 – Immediately Adjust Your Usage Patterns

The moment you have your baseline established, you want to go to work implementing simple energy-saving steps to start making an impact on your electric bill.

As I explained in this article, there are only two influencers on your electricity costs – the amount of electricity that you use and how efficiently you use it. We can go to work right now lowering our electric bill by simply adjusting our usage patterns.

Washing clothes in cold water, drying dishes at night when off-peak hour energy costs are generally lower, turning off lights and ceiling fans in unoccupied rooms, and air drying your clothes are all ways that you can immediately begig to cut into those energy costs.

For great ideas on how you can cut your electric costs, read 20 Tips To Reduce Your Electric Bill – #16 Is Amazing!

Step 3 – Conduct A Home Efficiency Audit

We’re going to be evaluating the impact of our usage pattern changes when the next monthly bill comes in, but in the mean time we need to begin a comprehensive home efficiency audit to really get a pulse on the energy use and efficiency of our house.

While a professional home efficiency audit would provide more in-depth information that we can obtain on our own, we can still get a pretty comprehensive evaluation of how efficient our home is.

I’ve written an extensive home efficiency audit guide that will walk you through the entire process. It even includes a downloadable audit checklist that you can use for FREE!

I really want to encourage you not to skip this step in the process. It is an essential piece of the puzzle that we will be working on throughout the rest of this article.

Step 4 – Determine Your Energy Saving Sweet Spots

Now that we have our efficiency audit completed, we can use it to determine which areas stand to make the largest impact for the least upfront cost.

While it’s true that replacing that old HVAC unit with a modern, high SEER variable-speed model will lower monthly costs (and we will talk about that later in our long-term planning strategy), right now we need to identify the low-cost solutions that are going to give us the best return on investment and that we can do ourselves.

Below are a few examples of low-cost opportunities to increase your home’s energy efficiency.

  • Replace incandescent bulbs with high-efficiency LEDs
  • Unplug devices when not in use or install a phantom energy prevention plug.
  • Replace curtains with insulated, thermal drapes
  • Lower your water heater thermostat to 120 degrees
  • Supplement or replace your outdoor lighting with solar

These are just a few potential opportunities for energy savings. Your home efficiency audit will show many other opportunities to save money with these low-cost and no-cost adjustments.

Take the time to really go through your home efficiency audit. Look at where the energy losses are and consider the simplest solutions to offsetting that waste. You may need to spend a little money up front to make these improvements but you are making an investment that will pay you dividends in energy cost savings for years to come.

Best of all, you can probably do all of these yourself!

Step 5 – Evaluate Savings

We are now at the point where we should see some measure of impact on our electric bill. Depending on what point in your billing cycle the usage adjustments and improvements were made, the electric bill will give us a new benchmark to work against.

Remember to not only compare your bill to the previous month but to the same billing period for the previous year. The reason we do this is to adjust for changes in seasons.

For example, if you measured in May against April, your bill may still have rose since it is getting hotter outside. What we need to do is compare it to the same billing cycle for the previous year as well so that we can draw a more accurate conclusion on the effectiveness of our efforts.

Step 6 – Advance Your Savings By Focusing On Energy Efficiency Home Improvements

This is where we really start to dig into the meat of things. These are mostly simple, DIY projects that you can do yourself but they are a bit more advanced than the sweet spots we addressed earlier. Each stands to make a positive impact on your energy use but, together, they represent a sizable savings on your electric bill.

Examples of Energy Efficiency Home Improvements include:

  • Air Seal around windows, doors, light fixtures, piping, outlets, and HVAC vents.
  • Apply Window insulation film
  • Insulate your water heater (and pipes running from it!)
  • Install low-flow shower heads

What other areas did you find in your home efficiency audit? Were there hot spots in certain areas of your ceiling? If so, additional insulation may be needed.

What about the bathroom exhaust fan? Is it often left on for hours (or even all night!) after people finish their shower and leave the room? An automatic humidity sensor will put a stop to that! (Read this post on automating your energy savings to really understand what an energy hog these devices are.)

This is the time for critical analysis. There are places within the structure of your home where you are bleeding money. We may not be able to put a stop to all of it but we want to seal up those bleeds where ever we can.

I recommend committing the first two weeks of a 30-day billing cycle to this step. Make your hitlist of the improvements that you can do yourself and commit a couple of weekends and a few evenings to sealing up every energy loss that you can.

Step 7 – Re-evaluate Savings

It’s time to take inventory of our energy savings once again. With our next full energy bill after implementing these energy saving strategies, have a look at the impact of your efforts. Again, comparing not only the previous month but the same billing cycle for the previous year, what is the impact?

At this point you should be seeing a sizable reduction in energy usage. Your adjustments to your energy use patterns along with the multitude of measures that you have made to improve the efficiency of your home should be resulting in a reduction in your electric bill that you can really see and appreciate.

At this point, you could call it a win and just keep reaping the rewards of your efforts every month when the electricity bill comes in.

But the question is, are you at a 50% reduction yet? Depending on the condition your home was in and the extent to which you have put into the home efficiency steps above, you may already be there. If not, however, it’s time to consider your home for what it is… an investment.

Step 8 – Determine Return On Investment For High Ticket Energy Saving Investments

We have all heard that high-efficiency appliances and mechanical systems (HVAC, water heater, furnace) can save us money. But don’t just rush out and replace appliances with Energy Star rated ones.

Yes, those appliances would likely save you money on energy costs. The question, however, is whether or not the upfront cost will result in a meaningful return on investment. To determine this, we need to do some basic factoring.

Have a look at the information you collected in your home efficiency audit. There are seven factors that should be consideredh when it comes to whether or not an appliance or mechanical system should be upgraded:

  • Age of current system
  • The anticipated remaining lifecycle of the current system
  • Energy use of the current system
  • Energy use of proposed system upgrade
  • Projected annual savings yield for the upgrade
  • Timeline for return-on-investment
  • Anticipated years of use

To prevent emotional decision making, we need to run the numbers and determine if an appliance upgrade makes financial sense. These six factors are meant to provide you with objective criteria so that you can use to make an unbiased investment decision.

I have outlined the seven-step decision making process for upgrading appliance in a comprehensive walkthrough. Take the time to read and really understand this process.

Step 9 – Establish an Investment Plan For Large Purchase, Return-On-Investment Worthy Appliances

If you have followed the six-step process for determining whether or not upgrading to a more efficient appliance makes sense for your situation, you now know exactly where it makes financial and logical sense to invest. Maybe for you, it’s time to replace that old dishwasher from 1981. Or perhaps your furnace is finally on its last leg.

The point is to not be blindly drawn into the allure of savings on appliances without doing your due diligence. Let the math guide your investment decisions, not the promises of energy savings that may or may not give you a return on investment over your lifetime or time at that location.

For those appliances that do meet replacement criteria, take the time to compare energy savings between brands and models. If there is one takeaway from this article that I hope you have gained it is that small savings add up over time.

If a more efficient model costs a bit more it may be worth the additional upfront expense but again, let the math guide your decision. “Perceived value” will not have an impact on your electric bill. Take the time and find the real savings solution for your situation.

If you do not have the funds to immediately invest in the upgrade and your existing appliance is still functioning, begin setting aside funds specifically for this investment. Establish an amount that you can comfortably set aside each month while you are doing your energy saving comparisons. By the time you have the money saved up, you will have gained a lot of insight into the brands and models that you compare and will be ready to make an informed decision.

One word of caution. Don’t wait until two years from now when that appliance finally gives out to start searching for the right replacement and funding. You have the knowledge of the expected remaining life cycle of your appliances and this is the time to start that “replacement fund” and begin comparing energy efficient alternatives.


I think it is important at this point to step back and take a look at all you have done. If you have followed the steps outlined, you have adjusted your energy usage patterns, tightened up the sweet spot energy saving opportunities around your home, and made some significant home improvements specifically aimed at improving the energy efficiency of your house.

The changes you have made will result in energy savings for years to come. You also have a firm grasp of the remaining life of your appliances and are starting a replacement fund to ensure that you have the money ready when replacing those appliances makes sense.

You can be very proud of what you have accomplished and know that you will be rewarded every month as you save money on your electric bill.

If this hasn’t gotten you to a 50% savings on your electric bill, then it’s time to go back and begin again at step one and start digging deeper to see what opportunities you have overlooked.

Remember, focus on the savings, not the effort it takes to get there. That part is just temporary.

Ready to advance your knowledge of energy efficiency? Read Why Is My Electric Bill So High? Here’s The Answer!

All my best.

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