Heating and cooling bills are among the largest energy expenditures for the average American household. There are some simple steps you can take to reduce your energy bills, including adding insulation to your home, blocking drafts and using programmable thermostats to control home temperatures. The deregulation of electricity markets in some parts of the country also allows alternative energy companies to supply electricity at lower cost from renewable sources.
Alternative energy sources, also known as renewables, such as solar, wind and geothermal, are becoming increasingly popular with both consumers and energy suppliers. Not only are they better for the environment, they are more cost-effective.
High energy costs due to heating and cooling
The average American home is a power-hungry one, using 903 kilowatt hours (kWh) each month, at an average cost of $107 per household. The biggest energy costs are due to heating and cooling. Water heating by itself accounts for 14 to 18% of a family’s utility bills. Air conditioning accounts for the largest chunk of residential electricity, about 19% of the total usage. Taken altogether, electricity usage in the U.S. in 2013 is over 13 times more than it was back in 1950.
Simple steps to reduce your energy bills
There are some simple steps you can take to reduce your energy bills. Adding insulation to attics and roofs is very effective in conserving heat in the winter and cooler air in the summer. Using insulating curtains at windows and glass doors can also reduce your heating and cooling costs considerably, while keeping your home temperature even and comfortable.
Blocking drafts with insulating tape is likewise a small step that can produce major savings. And by using a programmable thermostat to control your home temperature you can save an estimated 10% per year on heating and cooling bills.
Deregulation and alternative energy suppliers
Over the past 20 years, energy markets have been deregulated in many parts of the country, including the Northeast, the Mid-Atlantic states, and Texas. Unlike regulated markets where vertically-integrated utility companies control the entire process from the generation of electricity to delivery to the end user’s meter, in deregulated markets the functions of energy production and delivery are completely separated.
Utility companies in deregulated markets are not producers but only distributors of electricity, which is sourced from producers. This opens the way for alternative energy companies to source electricity from renewable energy companies, which produce electricity using wind, solar or thermal power. Deregulation has led to a tremendous increase in the demand for energy from renewable sources and alternative energy companies are trying to keep up with the demand.
Electric costs in deregulated markets are lower, because utilities are able to source electricity from cheaper sources like wind, solar and geothermal energy. For customers, there are thus at least two major benefits: they have lower electric bills, and the satisfaction of knowing that their electricity comes from renewable energy sources that are better for the environment.
