Wind and solar energy.

How Much Does Electricity Cost In The US?

Dec 5, 2022

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Whether you rent or own, how much electricity costs should matter to you. Your electric bill is an expense that never goes away, even while it fluctuates based on the season.

Overall, it seems the cost of electricity is going up just about everywhere. Here’s what you should know about the price of electricity.

The Kilowatt-Hour (kWh): A Measurement For Electricity Use

Have you ever taken a close look at your electric bill? You might notice the letters “kWh” followed by a number. That’s the amount of electricity your household used in the previous month, expressed in kilowatt-hours.

Your electric bill typically reflects a combination of your energy usage, applicable service charges and taxes. Some utility companies may even list the price per kWh, but that’s not always the case.

One kWh is the amount of electricity you would use by running a 1,000-watt appliance continuously for 60 minutes. According to EnergyBot, the average dishwasher is rated at 1,800 watts.

What’s The Average kWh Used Per Month?

According to the U.S. Energy Information Administration (EIA), American households used a monthly average of 886 kWh in 2021. That breaks down to nearly 29 kWh per day in a 31-day month.

Your actual electricity usage will vary by your home’s location, size and efficiency, as well as the time of year.

Average Monthly kWh Of Electricity Consumed

5 Highest Statewide Averages

State

Monthly Average Consumption (kWh per household)

Average Cost per kWh (cents)

Louisiana

1,192

11.02

Tennessee

1,183

11.07

Mississippi

1,171

11.56

Alabama

1,140

11.74

Arkansas

1,098

11.27

Source: EIA

5 Lowest Statewide Averages

State

Monthly Average Consumption (kWh per household)

Average Cost per kWh (cents)

Hawaii

531

33.49

California

542

22.82

Vermont

567

19.26

Maine

584

17.02

Rhode Island

585

22.30

Source: EIA

How Much Is The Average Electricity Bill Per Month?

The national average electricity bill was $121.01 per month, according to the EIA. Keep in mind that the cost of a kWh isn’t the same in every location. Even if you use the same amount of electricity as someone else, you may have different electricity rates.

This is one of the reasons more homeowners are choosing renewable energy such as solar power. Many utility companies have lower rate plans for homeowners who produce some of their electricity. Also common is net metering, an incentive that credits homeowners for excess power they contribute to the grid.

Get An Estimate

Considering solar? Run the numbers to see if it all adds up for you.

Average Electricity Cost Per Year Has Increased

A recent EIA report said the wholesale price of natural gas is driving the cost of electricity upward. The agency is forecasting that residential electricity prices could hit an average of 15.24 cents per kWh in 2023. If prices rise to that level, that will mean an average price increase of nearly 16% in 4 years.

Utility Dive, which provides utility industry news and analysis, says families in the United States face around $16 billion in annual utility debt. That’s up from $8.1 billion in total utility costs for 2019.

How Solar Could Lower The Cost Of Electricity

Renewable energy sources, not including hydroelectric power, are coming online in greater volume than other energy sources. Renewables such as solar are among the cheapest sources of new electricity generation at utility scale.

Electricity generated by photovoltaic panels costs 3 – 6 cents per kWh, depending on the type of solar panels and tracking systems used. Producing electricity with fossil fuel costs at 5 – 17 cents per kWh.

Powering a home with solar panels is a major upgrade project for any homeowner, but, as already mentioned, there are incentives for going solar. One incentive not yet mentioned is the federal solar tax credit, which is available for eligible homeowners and worth a considerable amount in savings. These incentives can allow solar panels to pay for themselves in 8 – 15 years. Prices for home solar panels have fallen by 55% since 2010.

Solar energy systems may lead to lower energy costs, whether your utility company switches to renewables or you add solar panels to your home.

4 Tips For Using Less Electricity

You can begin reducing your utility bills by implementing one or more of the following strategies for improving your home’s energy efficiency.

1. Watch Your Heating And Cooling Habits

Heating and cooling cost the most for the typical household – accounting for 47% of electricity usage. Using a smart thermostat can reduce your HVAC costs by 8% on average, according to the ENERGY STAR® website. A programmable thermostat can help you avoid overusing your HVAC during peak hours when utility companies often charge more per kWh. This device can also prevent you from using too much HVAC power when nobody is home.

2. Update Your Windows

Energy-efficient windows can reduce the strain on your HVAC system. According to the U.S. Department of Energy, heat gain and loss through windows is to blame for 25% to 30% of home HVAC use. Properly caulking and sealing windows or upgrading to ENERGY STAR®-rated windows can reduce HVAC costs.

3. Switch To LED Bulbs

Switching from incandescent bulbs or compact fluorescent lamps (CFLs) is a great step. According to the Department of Energy, switching to energy-saving LEDs can save the average household $225 per year in energy costs.

4. Install Solar Panels

Homeowners usually adopt solar for two reasons: to save money on energy and help the environment. Installing solar panels will allow you to use less electricity from the grid. You’ll be able to produce electricity from your own equipment, which can save you money over time.

While installing solar panels can have a high upfront cost, they pay for themselves in 8 – 15 years, on average. Also, states such as Illinois have local government and utility company incentives that can significantly reduce the cost to go solar.

FAQs: Electricity Costs

Here are a few questions we hear about electricity costs.

What’s the average cost of electricity per day?

Nationwide, the average monthly cost of electricity is $121.01. Multiply that by 12 months and divide by 365 days, and you get approximately $3.98 for daily electricity costs. Your numbers will vary by factors like your energy-use habits and home efficiency.

Location is also a factor. The different climates in California, New Jersey, Louisiana and Maine, for example, influence electricity use and costs in those areas. Your actual daily use will also fluctuate by season.

How much is the average electric bill?

According to the EIA, American homeowners had an average monthly electricity bill of $121.01 in 2021. Remember that electricity providers charge different rates per kWh and have different service charges. It’s possible for a person in Texas to use the same amount of electricity as someone in New York but have a different electric bill.

Where are electricity costs highest?

Hawaii has the highest average electricity rate at 33.49 cents per kWh. Hawaii residents have the lowest energy consumption, though, at an average of 531 kWh per month.

The Bottom Line: Electricity Costs Are Rising

If the EIA’s projections prove accurate, we can expect electricity rates to rise over the next few years. More clean energy options, though, could counter the increasing wholesale prices of natural gas and stabilize energy prices.

Rocket Solar does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Get An Estimate

Considering solar? Run the numbers to see if it all adds up for you.