With less than 5% of the world’s population, the U.S. consumes a whopping 18.5% of the world’s energy where just over 20% is attributed to households at a cost of $2,200 per year. Heating systems (natural gas or electricity) use the most energy in the home with 42% average utilization, followed by your water heater (i.e. showers, baths, laundry, dishwashing, general cleaning) at 18%. Cooling systems, lighting, and refrigeration are your next three consumers of energy at 6%, 5%, and 5% respectively. 1
In other words, you should first focus on your heating system when looking to reduce your utility bill. You can lower energy costs by installing insulation, upgrading equipment, and/or setting up automation. A smart thermostat that automatically adjusts its target temperature based on time, day, season, weather, and people in the home can slash costs. Nest reports trimming energy use by 10-12% on heating (15% on cooling) for average savings of $131 to $145 per year thus paying for itself after 2 years.
For cooling, tying this in with a home automation system can lead to bigger savings. For instance, adding a smart fan enables you to give your A/C a break with each degree raised on your thermostat lowering your costs by up to 5%.2 Both the fan and thermostat will learn your new preferences and adjust accordingly. If each home thermostat was raised 6 degrees, we would cut up to 30% in energy utilization and reduce carbon emissions by 78B pounds, the equivalent of taking 3.2M homes off the grid for a year. Shave off even more money, by also having your thermostat adjusts blinds based on time and temperature to absorb solar heat or block it.
Aside from using less hot water, the best ways to cut your water heating bill are to turn down the thermostat on your water heater, insulate your water heater and pipes, or buy a more efficient water heater. For every 10 degrees you turn it down, you’ll save 3% to 5% on your bill. Most water heaters come preset at 140 degrees, which has the added risk of scalding; however, the Energy Department recommends most households lower it to 120 degrees. Other ways to conserve hot water include taking showers instead of baths, taking shorter showers, fixing leaks in faucets and pipes, and using the lowest temperature settings on clothes washers. We also recommend turning your water heater off or setting it (and other appliances) into “away mode” when going on vacation.
In short, your heating system and water heater combined utilize 60% of your household’s energy. Hence, it’s best to focus on these items when looking to reduce overall utility payments. You should also look at your cooling system, since it can lower your utility bill 10x over your water heater per degree saved in energy use. By adding smart products you can have more control of these lower costs with the benefit of remote access, automation, and even analytics.
1. National Energy Education Development (NEED) Intermediate Energy Infobook
2. Hoyt, T., K.H. Lee, H. Zhang, E. Arens, T. Webster, 2009, “Energy savings from extended air temperature setpoints and reductions in room air mixing.” International Conference on Environmental Ergonomics 2009