How to Lower Heating and Cooling Costs at Home
Heating and cooling are the largest energy users in most homes. See what the Department of Energy says each fix is worth, with math on a sample bill.
If you want to cut a home energy bill, start where the energy goes. The U.S. Department of Energy's Energy Saver guide says air conditioning and space heating together are the largest energy users in your home, typically making up about 32% of your energy use. That makes heating and cooling the first place to look, ahead of unplugging chargers or swapping a single light bulb.
The thermostat setting
The cheapest change is behavioral. The Department of Energy says you can save as much as 10% per year on heating and cooling by turning your thermostat down 7 to 10 degrees Fahrenheit for 8 hours a day in the fall and winter, and turning it up in the spring and summer. The easiest 8 hours for most households are overnight or while everyone is at work or school.
There is one caution in the guide: if you have a heat pump, do not do large setbacks without a smart or programmable thermostat designed for heat pumps.
A smart thermostat is a Wi-Fi enabled device that adjusts temperature settings automatically. It does not save money by itself; it saves money by making the setback happen every day without anyone remembering to do it.
Sealing air leaks
Warm air escaping in winter and hot air leaking in during summer make your system run longer. The Department of Energy states that by sealing uncontrolled air leaks, you can save 10% to 20% on your heating and cooling bills. Common leak points include gaps around windows and doors, attic hatches, and places where pipes or wires pass through walls. Weatherstripping and caulk are inexpensive, and many leaks can be found by feeling for drafts on a cold, windy day.
Windows without replacing them
New windows are expensive. The guide offers a cheaper option: low-e exterior or interior storm windows, which it says can save 10% to 30% on heating and cooling costs, depending on the type of window already in the home.
Bigger upgrades, in context
When equipment needs replacing anyway, efficiency matters. The Department of Energy notes that new energy-efficient heating or cooling equipment alone can reduce energy use by 20% or more, and that combining a new system with recommended insulation, air sealing, and thermostat settings can cut heating and cooling bills by about 30%. It also says heat pumps can reduce electricity use for heating by approximately 50% compared with electric furnaces or electric baseboard heaters.
These are long-term decisions. The low-cost steps above come first.
What the percentages mean in dollars
Percentages only become real against your own bill. Suppose a household spends $1,400 a year on heating and cooling. This is an assumed figure for illustration; your utility bills will show your actual amount.
| Step | Department of Energy estimate | Possible yearly savings on $1,400 |
|---|---|---|
| Thermostat setback, 7 to 10 degrees for 8 hours | Up to 10% | Up to $140 |
| Seal air leaks | 10% to 20% | $140 to $280 |
| Low-e storm windows | 10% to 30% | $140 to $420 |
The savings do not simply add together, because each step reduces the base the next one works on, and results depend on climate, home size, and current condition. Still, the order is clear: the thermostat setting costs nothing, and air sealing costs little.
Why your electricity rate matters
If you cool with electricity, the price per kilowatt-hour sets how much each saved hour of air conditioning is worth. The U.S. Energy Information Administration reports that the average residential electricity price in the United States was 18.31 cents per kilowatt-hour in July 2026, up from 17.45 cents in July 2025. Prices vary widely by state. Check your own bill for your rate; the higher it is, the faster efficiency steps pay off.
A weekend plan
- Look up a year of utility bills and estimate how much goes to heating and cooling (the difference between your mild-month and peak-month bills is a rough guide).
- Set a schedule on your thermostat for a 7 to 10 degree setback for 8 hours a day.
- On a cold, windy day, walk the house and feel for drafts at windows, doors, attic hatches, and outlets on exterior walls, and mark each one.
- Seal the obvious leaks with weatherstripping and caulk.
- Revisit bigger upgrades only when equipment is due for replacement.
Key takeaways
- Heating and cooling typically make up about 32% of home energy use, the largest share.
- A 7 to 10 degree setback for 8 hours a day can save up to 10% a year on heating and cooling.
- Sealing air leaks can save 10% to 20% on heating and cooling bills.
- On an assumed $1,400 yearly heating and cooling cost, those two steps could be worth roughly $140 to $280 each.
- The U.S. average residential electricity price was 18.31 cents per kWh in July 2026, so efficiency is worth more where rates are higher.