Electricity bills are the most significant part of their monthly budget in most households. Some homeowners even sell their homes not because they can no longer afford the mortgage but because they can’t sustain paying their electricity bills.

Fortunately, electricity costs worldwide are increasing by 1.3% every year during the last 10 years–and this increase is far from stopping now. This is why homeowners need to understand their electricity bills and know how to decrease their energy use.

What makes up your electricity bill?

Everyone’s electricity bill is divided into the actual energy cost and the operational cost.

The actual cost is used to purchase and maintain the source of electricity, such as fuel, solar, natural gas, etc. On the other hand, the operational cost consists of retaining the wirings, cables, electricity meters, grids, and other infrastructure used to deliver the electricity to your homes.

While the significant spike in electricity cost is mostly related to the actual energy cost, a good portion of the increase can also be attributed to the rise in operational cost.

How can you lower your electricity bill?

1. Energy-efficient appliances

Fortunately, there are already lots of energy-efficient appliances on the market today. Instead of using incandescent bulbs, switch to LED lamps that use lower energy. Energy-saving air conditioners and refrigerators can help you save 20%-50% of energy every month–that’s a 20%-50% decrease on your electricity bill.

2. Go solar

It’s also high time to join the solar power movement. A fully functional residential solar project can help you save at least $20,000 on your annual electricity bill. You can even increase your savings by up to $50,000 if you expand your residential solar project. 

Furthermore, you can use your solar panels and equipment for up to 20 years as long as they’re properly installed in your house. 

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