A report from the U.S. Energy Information Administration (EIA) shows that residential electricity prices spiked 3.1% in 2014. This was 1% higher than the increase from 2012 to 2013 and was the biggest price surge since 2008. In terms of cost, the average American spent $114.11 on their monthly electricity bill in 2014, and prices are unfortunately predicted to rise in the coming year.
What are the reasons for these yearly price increases? Some of the factors identified by the EIA include the following:
- Higher prices on purchases from regional electricity markets
- Greater requirements placed on generating energy from renewable sources
- Utility investments made by power companies to increase efficiency
- Increased investment in power distribution infrastructure
The silver lining to the bad news of rising energy costs is that, as the EIA points out, the retail price of electricity to the residential sector is only projected to rise 0.7% in 2016. They estimate that the smaller increase will be driven by the falling cost of fuel used for power generation. However, as this infographic RSI developed shows, there are a variety of ways to reduce or eliminate the impact that rising electricity costs have on your wallet from year to year.
Reducing the Impact of Rising Energy Costs
Since heating, ventilation, and air conditioning (HVAC) equipment is responsible for nearly half of the average homeowner’s energy costs, many of the opportunities to save on electricity can be found in these systems. One thing that can lower your monthly bill significantly is raising the thermostat by 10 to 15 degrees in the summer and lowering it by 10 to 15 degrees in the winter for 8 hours out of the day. Additionally, making sure to replace or clean the unit’s filter once a month can also save you a significant amount of money on energy costs. To supplement these and the other tips explained below, the U.S. Department of Energy has some additional advice to help you reduce your monthly electricity bill even more:
- Install a programmable thermostat.
- Make sure windows and doors are closed when heating or cooling your home.
- Plug home electronics and appliances into power strips and turn them off while not using them.
- Upgrade to ENERGY STAR® appliances.
- Lower your water-heater thermostat to 120 degrees.
While homeowners may have little control over the rising cost of electricity, there are some simple ways they can cut back on usage and keep bills manageable. For more energy-saving HVAC maintenance tips, see the infographic below.
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