Save Money With These Cost-Effective Energy Efficiency Tips

With talk of fuel shortages this winter, volatile prices and climate change concerns, making our homes more energy efficient feels more pressing than ever. The good news is, a few easy and affordable ways can make a big difference, along with a new set of federal tax credits and rebates to help offset the cost.

“The climate-related measures in the Inflation Reduction Act aim to lower homeowners’ energy consumption and increase our homes’ efficiency,” says Mallory Micetich, a home expert at Angi. “But keep in mind that many of the IRA’s benefits are based on income, so high-earning households may not qualify.”

Even if your financial status precludes you from taking advantage of IRA rebates, your state and utilities may offer similar incentives. “Do your research and ask your contractors about different programs,” says Sara Baldwin, director of electrification at Energy Innovation. “Regardless of your income, energy efficiency is a smart investment that pays off in the long-run.”

Here are some of the most effective and affordable steps you can take to cut your monthly energy bills.

Energy Audit

Find out which parts of your home are most in need of an efficiency upgrade. The IRA offers up to $150 toward an energy audit, which typically costs between $200 and $600. These include a room-by-room inspection of everything from door seals to appliance efficiency testing.

To find local energy audit services, ask your power company, state or local government energy office. Or try the U.S. Department of Energy’s Home Energy Score program and Home Performance with Energy Star.

Weatherizing

Boosting your insulation and sealing leaks around your windows and doors helps as well. “Insulating the attic, walls and crawlspace or basement, as well as airsealing is where it’s at,” says Nate Burger of Eco Handyman in Boulder, Colorado. “This comes before replacing windows and switching to air source heat pumps and solar.”

The IRA offers a $1,200 tax credit per year for weatherization, and with an additional $1,600 rebate down the road. The U.S. Department of Energy offers a handy guide with tips on how to weatherize your home. Or you can hire a pro.

LED Lighting

Swapping out your incandescent bulbs for LEDs is one of the most cost-effective energy savers. “You’ve probably heard people say this a billion times,” says Micetich, “but now there’s an enormous variety of color, brightness and size, so there is no reason not to, especially because the price has come down.”

Some states and many electric utilities offer financial incentives to help with the switch to LED.

Smart Controls

A relatively new development, smart apps and devices like Kasa Home and Nest can help you use less electricity during peak times when it’s in high demand and more expensive.

“This is a breakthrough for the industry,” says Bartholomy. “For example, you can pre-cool your home before you get home from work, or heat up your water in the middle of the day when electricity is cheaper, then use it for your evening showers and dishwashing. It’s also really going to help the grid when we’re dealing with heat waves.”

Cooking

Gas for cooking is not only inefficient, it’s bad for indoor air quality. The IRA offers rebates for switching to an electric range. If you aren’t ready for that, try an induction hob countertop burner or an electric kettle to reduce your gas use. A double hob costs around $200.

“It will give you the opportunity to fall in love with induction before giving up your gas stove,” says Bartholomy. “It will also give you some extra efficiency and cleaner air in the meantime.”

Heat Pump Water Heaters

If your water heater breaks, Rheem has a breakthrough solution. The company just introduced the first 120-volt heat pump water heater, which can be plugged in without a dedicated circuit breaker. Starting in January, the IRA will offer a $2,000 tax credit for a heat pump water heater.

Heat Pump HVAC

Heat pump systems are not cheap, ranging from around $10,000 to $18,000. But they’re a great investment if you need to upgrade your heating or want to add cooling in your home.

“There are so many benefits to a heat pump HVAC unit,” says Bartholomy. “You get heat and AC in one unit. They’re quiet, incredibly efficient, and they work in every climate.” And they can cut energy costs by 50 percent, so if you can afford one, the savings will add up.

These systems are available as wall, ducted and window units. Starting in January 2023, they’re eligible for IRA tax credits of $2,000. While you can DIY some of the work, the systems do require professional installation. Check with local incentive programs to find a qualified contractor, or ask the manufacturer for preferred contractors in your area.

HVAC and Water Heater Maintenance

Get your AC and furnace checked at least once a year by a professional to ensure they’re operating as efficiently as possible, says Baldwin. Change your filters once every three months, or more frequently if your area experiences a lot of bad air days or smoke from wildfires.

“These are low-hanging fruit and can help save money immediately and year round if done with frequency,” she says. “Just as you tune your car periodically, treat your HVAC system the same way. It will last longer and save you money.”

Also, adjust the thermostat on your water heater. Most water heaters are set to high by default, resulting in scalding hot water and energy waste. A slight adjustment down can make a big difference and save money.

Electrical Panels and Service

Research whether a heat pump, induction cooktop or other energy-efficient electrical device requires additional amperage in your electrical panel or upgraded wiring.

“Get an understanding of that because you don’t want a situation where you disconnected your furnace or your air conditioner and realize, oh, no, I need to go through a whole process with my utility to upgrade my panel before I can put a new one in,” says Panama Bartholomy, director of the Building Decarbonization Coalition.

What’s the End Game?

After you’ve weatherized your home, the ultimate goal for energy efficiency is to switch every appliance to electric.

“An all-electric house is the best kind of house for climate, and also for your wallet,” says Bartholomy. “The electric grid can be powered by all the different kinds of fuels, like sun, wind, hydro, etc., so if everyone uses electric appliances then the grid can get cleaner over time and can adjust inputs as needed.”