Reducing Home Energy Costs

In reviewing the electricity price trends over the past 50 years (see Figure 1) the current average U.S. real electricity prices (in 2007 dollars) are at a level consistent with the industry’s lowest real levels experienced in the 1960s. These relatively low real electricity costs have had the general tendency to discourage energy efficiency initiatives in many parts of the U.S. However, many consumers are increasingly interested in reducing their overall household energy usage and costs. There are certainly opportunities to achieve significant savings in most households and the first step to identifying cost savings opportunities is to understand the typical consumption levels and unit costs of the major energy consuming devices of most households.

Targeted Devices

Assuming a per kilowatt-hour price of electricity of $0.10, the following energy usage and cost examples are typical for most residential consumers:

• Heat Pump/Central Air: Assuming typical consumption of 15,000 watts per device and a cost per hour of $1.50, the use of heat or central air conditioning costs between $15 and $22 per day.
• Water Heater: A typical household will spend several dollars a day with washing clothes, taking showers, and cooking food. A typical load of clothes uses $1.50 worth of electricity and a shower costs approximately $1.00.
• Refrigerator: Typically operating 10 hours a day, refrigerators cost in the range of $1.00 to $2.00 per day.
• Computer and Televisions: Leaving a computer or television on all day will cost between $1.00 and $2.00 per day.
• Light bulbs: seemingly low in cost per hour ($0.6 cents per hour), lighting costs can accumulate rapidly with a tendency to leave several fixtures on continuously. Typically, a continually running light bulb can cost between $1.00 and $2.00 per month. If a large number of lights (e.g. kitchens and baths) have long operating hours then the typical house could easily develop a potential waste of $20.00 to $30.00 per month.

Realizing Energy Costs Reductions

In order to realize any reduction in energy costs, consumers will need to alter their behaviors and activities related to the major energy consuming devices noted above. Some specific examples include:

• Use programmable thermostats and apply discretion in setting temperatures for central heating and air conditioning.
• Improve efficiency in washing clothes and use energy efficient shower heads.
• Avoid keeping the refrigerator door open for extended periods of time.
• Minimize the amount of time computers and televisions are on, particularly in recreational settings.
• Turn off lights when not in use (notwithstanding safety and security).
• Install occupancy sensors in major lighting areas such as kitchens, basements, and garages.

No one action will have dramatic results. But taken in their entirety, can easily save a household $500 per year.