Cut energy costs

Last reviewed: May 2009

Families will spend an average of $2,100 on home energy costs this year, according to the Alliance to Save Energy, a nonprofit group based in Washington, D.C. The good news is that there has never been a better time to work toward reducing that bill by making your home more energy-efficient.

The American Recovery and Reinvestment Act of 2009 extends consumer tax credits for energy-efficient upgrades around the home through 2010. Consumers can now claim a credit worth 30 percent of the cost for items such as energy-efficient windows and insulation up to $1,500. (The prior limit was $500.) Some renewable-energy systems, including solar panels, could also be worth a 30 percent tax credit through 2016. So if you are inclined to make an upgrade to your home, now is the time to do it or to set money aside to do it before the credits expire.

There are plenty of ways to save money on home-energy costs without making an investment in pricey windows. Here are some no- or low-cost solutions.

Conduct a home-energy audit

Sure, you can spend $300 to $500 to have someone come into your home and give you a detailed report. But you can also use the Department of Energy's Home Energy Saver calculator (at for a do-it-yourself audit. Just enter your ZIP code and some personal information, including the size of your home, and you'll get ideas on how you can save money around the house.

Plug the leaks

Operating the heating and cooling systems accounts for 46 percent of the average home's utility bill, according to the Energy Department. For the best return on your energy-conservation effort, start by making sure all windows and doors have good weather stripping. If you have an attic, make sure there's sealant around pipes, chimneys, ductwork, or anything else that comes through the attic floor. Sealing those leaks is cheap and easy and can save 10 percent, or $190 per year for the average home.

Adjust the thermostat

On most systems, you can cut heating and cooling costs by an additional 20 percent by lowering the thermostat during the winter by 5° F at night and 10° F during the day when no one is home, or by raising it during air-conditioning season. You can do that with daily adjustments of a simple thermostat, but few of us are so diligent. Instead, install a programmable thermostat so that you can set it and forget it.

Use cold water

Heating water is the second-largest energy hog in the home, accounting for 12 percent of your energy use and costing the average household around $250 a year. Short of replacing the water heater with a more efficient one, homeowners can save 5 percent on their utility bill by dropping the water temperature to 120° from 130° F and insulating the water pipes. Also consider washing your clothing in cold water—you can save $60 a year. Tip: Put your hand on your hot water heater. If it's cool, your unit is well insulated. If it's warm, cover it with a water heater jacket, available at hardware stores and home centers.

Switch to energy-efficient lightbulbs

Replace your incandescent bulbs with compact fluorescent lightbulbs (CFLs) and you can save up to $30 per bulb over its lifetime. That's because CFLs use one-quarter to one-third less energy and can last up to 10 times longer than traditional bulbs, says Ronnie Kweller, a spokeswoman for the Alliance to Save Energy.

Buy Energy Star products

When it's time to buy a new appliance, make sure it meets Energy Star standards. A home that uses Energy Star products can save a significant amount of electricity and money each year compared with a home that doesn't.

There's no shortage of ways to save money on home energy costs. For more suggestions, go to or see our energy-saving guide.