With residential electricity use projected to increase by 2.8% this year, the personal-finance website WalletHub released its report on 2021’s Most & the Least Energy-Expensive States.

For a better understanding of Americans’ energy costs relative to their location and consumption habits, WalletHub compared the average monthly energy bills in each of the 50 states and the District of Columbia using a special formula that accounts for the following residential energy types: electricity, natural gas, motor fuel, and home heating oil.

Energy Consumption & Costs in California (1=Most Expensive; 25=Avg.):

  • Avg. Monthly Energy Bill: $321
  • 7th – Price of Electricity
  • 50th – Electricity Consumption per Consumer
  • 13th – Price of Natural Gas
  • 30th – Natural-Gas Consumption per Consumer
  • 1st – Price of Motor Fuel
  • 40th – Motor-Fuel Consumption per Driver

Experts weighed in on the topic:

What are some good tips for saving money on energy bills?

“Space heating and cooling usually account for almost half of home energy use. Therefore, focusing on turning your thermostat down in the winter and up in the summer when you are not home, or sleeping is a great way to reduce your bills. Investments in attic and wall insulation can also be great ways to save money, particularly if you have an older home,” according to Erica Myers, an assistant professor at the University of Illinois at Urbana-Champaign.

“Think in terms of conserve, improve, invest. Conserve by using choices and behaviors to save money. This is the classic ‘turn off the lights’ option … Improve by upgrading the performance of your energy consumption … Participate in efficiency incentives that produce longer-run savings in energy by improving lighting, insulation, and appliances.

“Finally, invest in playing a whole new role in the energy system by changing from a consumer to a prosumer (producer and consumer) by building your own capacities to produce and even sell energy. Rooftop solar and other distributed forms of energy generation can work with the grid, home energy storage, and electric vehicles to make you a player rather than just a price-taker in the energy system,” said Mark Alan Hughes, Ph.D. , a professor at the University of Pennsylvania.

What makes energy costs higher in some states than in others?

“Many factors affect the energy prices in a given state. For electricity, these factors include state and local taxes, state energy and environmental policies, market regulation and design, the generation mix across fuel types, and access to generation fuels,” added Harrison Fell, a senior research scholar, at Columbia University.

“One of the most important drivers of electricity prices is the local cost of generation. For example, prices tend to be lowest in places where a lot of inexpensive hydro is available and higher in areas that depend more on fossil fuel generation. Differences in electricity prices across regions can also be driven by local policies such as 1) funding energy efficiency initiatives, 2) renewable generation requirements, or 3) past investments in the distribution network,” Myers said.

Are tax deductions and credits effective at incentivizing households to be more energy efficient?

“Yes, but they are often insufficient. Just because energy efficiency improvements can be self-financing does not mean they are self-implementing. Confusion, complexity, and time-consuming choices can be enough to derail energy efficiency opportunities. More affluent households can feel like their time is literally too valuable to spend on saving money and less affluent households can literally not afford the time it takes to save money. Designing ways to bundle, automate (e.g., opt-out rather than opt-in), wholesale (e.g., building code requirements) energy efficiency at the systems level is much more reliable and probably necessary to get the full value to society energy efficiency,” Hughes added.

“The uptake of energy efficiency programs offered by many utilities is notoriously low. Improving those incentives for energy efficiency likely helps, but energy consumption, particularly in electricity and heat, often faces a saliency problem. That is, most consumers are unaware of how much they pay per unit for electricity and how much any given appliance uses, so it is very difficult for consumers to calculate potential savings from energy efficiency upgrades,” Fell said.

Source: WalletHub