How to Lower Your Electric Bill in Texas

The electricity industry doesn’t want you to know this: the single biggest lever for lowering your bill has nothing to do with your thermostat.

It’s your rate. Competitive 12-month fixed plans ran about 12 to 15 cents per kWh as of September 2026, and that three-cent spread costs the average Texas household about $395 a year. Yet most bill-cutting advice focuses on behavioral changes that save $10-20 per month while ignoring the rate that matters most.

Here’s the uncomfortable truth: The average Texas household used 1,096 kWh per month and paid about $164 a month in 2024 (EIA). Plans on the market differ by several cents per kWh for the same electricity, so the wrong plan costs hundreds a year. Let’s fix the rate problem first, then talk about the behavioral stuff.

Free Changes (Do These Today)

1. Raise Your Thermostat Just 2 Degrees

Savings: $5-10/month in summer

Set your thermostat to 78°F when you’re home in summer. That’s the Department of Energy’s recommended summer setting, and DOE’s rule of thumb is about 3% off cooling costs for every degree you move the dial.

Two degrees, from 76°F to 78°F, trims roughly 6% of what you spend on cooling. On a $150 summer bill where about half the total is the air conditioner, that’s about $5 a month; on a $300 bill, about $9. Small, but it costs nothing and it compounds with everything else on this list.

The catch: Your home will feel warmer initially. Your body adjusts within a few days. Use ceiling fans to make it feel cooler without lowering the temperature.

2. Use Ceiling Fans (The Right Way)

Savings: $15-20/month in summer

Ceiling fans create a wind-chill effect that makes rooms feel 4°F cooler without changing the actual temperature. According to the Department of Energy, this allows you to raise your thermostat setting by 4°F with no reduction in comfort.

Here’s the key: Set fans to spin counterclockwise in summer (creates downward airflow). Turn them off when you leave the room—fans cool people, not air. A ceiling fan costs about a cent per hour to run (a 75-watt fan at Texas’s 15.9¢/kWh average), while central AC costs 30 to 50 times that.

3. Fix Your Thermostat Schedule

Savings: $10-15/month

You can save as much as 10% per year on heating and cooling by turning your thermostat back 7-10°F for 8 hours per day from its normal setting. That’s roughly $150 annually for most Texas homes.

Summer schedule:

Home: 78°F
Away: 85°F
Sleeping: 80-82°F

Setting it to 85°F while you’re away is a comfortable middle ground. DOE calls it a misconception that the system works harder to cool a hot house back down; the longer the house sits warmer, the more you save.

4. Switch to the Right Electricity Plan

Savings: $20-50/month

This is the single biggest lever you have. Texas’s average residential price was 15.9 cents per kWh in June 2026 (EIA), and competitive 12-month fixed plans sit in a 12-to-15-cent band. At the average 1,096 kWh monthly usage, a 12-cent plan is a $132 bill and a 15-cent plan is $164—same electricity, different company. Learning how to switch electric companies takes 15 minutes and could save you hundreds annually.

For high-usage homes (1,500+ kWh in summer): Look for plans with low rates at high usage levels. Many plans get cheaper the more you use.

For apartments and low-usage (under 700 kWh): Avoid plans with minimum usage fees. Look for flat-rate plans without usage penalties.

For flexible schedules: Consider free nights plans if you can shift laundry, dishwashing, and charging to the plan’s free overnight hours. Electric companies like TXU Energy offer popular free nights plans. Savings depend on shifting 40-60% of usage to off-peak hours.

Compare plans on ComparePower to see current rates for your address and usage.

5. Clean Your AC Filter Monthly

Savings: $4-11/month

A dirty air filter restricts airflow, forcing your HVAC system to work harder. The US Department of Energy estimates clean air filters can cut an air conditioner’s energy use by 5 to 15%.

Here’s the arithmetic, with the assumption stated up front. Air conditioning is about 28% of a Texas home’s electricity across a full year (EIA RECS 2020) and takes a bigger share of a July bill than an April one. Assume half of a $150 summer bill is cooling—an assumption, not a measurement—and that’s $75 going to the AC. A 15% cut saves about $11 a month; a 5% cut saves under $4.

Filters cost $3-5. Change them every 30 days during heavy AC months (May-September in Texas), every 90 days in milder months.

6. Unplug Energy Vampires

Savings: $5-15/month

Standby power—when devices are “off” but still plugged in—is 5 to 10% of residential electricity use (Lawrence Berkeley National Laboratory). At the Texas average bill of about $164 a month, that’s roughly $8 to $16 bleeding out of the wall every month. You won’t recover all of it, since the DVR still has to record, but power strips on the entertainment center and the home office get you most of the way.

The worst offenders:

Cable boxes and DVRs
Game consoles
Desktop computers and monitors
Coffee makers with digital displays
Phone chargers (when not charging)
Printers

Use power strips for entertainment centers and home office setups. One switch kills phantom drain from multiple devices. Or just unplug devices you don’t use daily.

Low-Cost Upgrades ($20-100)

7. Install a Smart Thermostat

Cost: $130-250 | Savings: $150-250/year

Smart thermostats like Nest and Ecobee learn your schedule and automatically adjust temperatures for maximum efficiency.

Documented savings:

ecobee says its customers save up to 26% on heating and cooling costs (company analysis, 2021)
Nest users save 10-12% on heating, 15% on cooling
ENERGY STAR certification requires average run-time savings of at least 8% on heating and 10% on cooling

Some utilities and electric companies offer smart thermostat rebates or bill credits for joining demand-response programs; check yours before you buy. At $130-250 for a device that saves $150-250 annually, payback is roughly a year, faster with a rebate.

8. Switch to LED Bulbs

Cost: $50-75 for whole house | Savings: $60-75/year

LEDs use 75-85% less energy than incandescent bulbs and last 25 times longer. A 60W incandescent costs about $7/year to run (at Texas’s average 15¢/kWh). A 9W LED providing the same light costs $1/year.

For a home with 40 bulbs, switching from incandescent to LED saves $240/year. Even compared to CFLs, LEDs save money and don’t contain mercury.

Do the math: If you’re still using incandescent bulbs in high-use areas (kitchen, living room, bathrooms), swap them first. Payback is immediate.

9. Add Weatherstripping and Caulk

Cost: $20-40 | Savings: $10-15/month

Air leaks around doors and windows make your AC work harder. Weatherstripping and caulk seal gaps and cost about $30-40 for materials.

Focus on:

Door sweeps (especially garage access doors)
Window frames where you feel drafts
Gaps around exterior pipes and vents
Attic access panels

This is a Saturday afternoon project that pays for itself in 2-3 months.

Bigger Investments ($200-500)

10. Lower Your Water Heater Temperature

Savings: $36-61/year

Most water heaters ship set to 140°F. The Department of Energy recommends 120°F for most households, which can cut water heating costs by 4-22% a year.

Water heating is about 18% of a typical U.S. home’s energy use (DOE) and about 11% of a Texas home’s electricity (EIA RECS 2020). On a $150 monthly electric bill, 11% is roughly $17 a month. DOE’s $36 to $61 a year is the standby loss a hotter tank bleeds off around the clock, and recovering it costs nothing but a turn of the dial.

How to adjust: Look for a temperature dial on your water heater (gas or electric). Turn it to 120°F or the “warm” setting. Wait 24 hours and test your hot water temperature.

Safety note: 120°F is safe for most households. If someone in your home has a suppressed immune system or chronic respiratory disease, consult a doctor first, as there’s a slight increased risk of Legionella bacteria below 140°F.

11. Optimize Your Refrigerator

Savings: $5-10/month

Your refrigerator runs 24/7 and accounts for about 8% of household electricity use (EIA RECS 2020). Small optimizations add up:

Set proper temperatures:

Refrigerator: 37-40°F (FDA says at or below 40°F)
Freezer: 0°F (FDA)

Colder than that wastes energy without making food any safer.

Other tips:

Clean the coils twice a year (dirty coils make the compressor work harder)
Check door seals for cracks or gaps
Keep it at least 2/3 full (less air to cool)
Leave 3-4 inches between the wall and back for airflow
Don’t place it near your oven or in direct sunlight

12. Use Time-of-Use Plans Strategically

Savings: $30-60/month (if you can shift usage)

Time-of-use plans like free nights (hours vary by plan) or free weekends can dramatically cut bills—if you can shift high-energy activities to off-peak times.

High-energy activities to shift:

Running the dishwasher (1-2 kWh per load)
Clothes dryer (2-5 kWh per load)
Charging electric vehicles (varies)
Running pool pumps (can be automated)
Laundry washing (0.5-2 kWh per load)

If you already use 40-60% of your electricity during off-peak hours, or can get there with small adjustments, you may see tangible savings compared to a fixed-rate plan. However, these plans charge a higher rate during the hours that aren’t free than a comparable fixed-rate plan does, so daytime power can quickly erase the savings; check the EFL’s average price at your usage.

Who benefits: Night shift workers, people working from home with flexible schedules, EV owners who charge overnight, families who can run appliances in the evening.

Who should avoid: Anyone home during the day running AC heavily, families with rigid schedules that require daytime laundry and cooking.

Compare time-of-use plans to see if the math works for your schedule.

What About Solar?

Rooftop solar is a bigger topic that deserves its own discussion, but here’s the quick math for Texas in 2026:

Average system cost: about $2.25 per watt installed in Texas as of September 2026 (EnergySage), roughly $18,000-29,000 for an 8-13 kW system Federal tax credit: none for purchased systems; the 30% residential credit ended for systems placed in service after December 31, 2025 Payback period: about 13 years on average in Texas (EnergySage) Annual savings: $1,200-2,000 once installed

Solar makes sense if you’re planning to stay in your home for 10+ years, have good southern exposure, and want to lock in electricity costs. It’s not a quick win for immediate bill reduction.

Companies like Rhythm Energy and Green Mountain Energy offer solar buyback plans if you already have panels or are installing them.

The Reality Check

You don’t need to do all 12 of these. Pick the low-hanging fruit:

Zero cost, do today: Raise thermostat 2 degrees, change your schedule, use ceiling fans, clean AC filter. Expected monthly savings: $35-55

One-time purchases under $150: Smart thermostat (basic model or with a rebate), LED bulbs, weatherstripping. Expected monthly savings: $25-35 Payback period: 3-6 months

The big one: Switch to a cheaper electricity plan. Understanding fixed vs variable rate plans helps you pick the right type. Expected monthly savings: $20-50 Time required: 20 minutes

A typical Texas household implementing the free changes plus a plan switch can realistically cut their electricity bill by $60-100/month. Over a year, that’s $720-1,200 back in your pocket.

The Bottom Line

Texas gives you two advantages: a deregulated market where you can shop for cheaper rates, and enough competition that companies have to compete on price. Use both.

Start with the free stuff (thermostat, fans, filters), switch to a better electricity plan, then add smart home tech when it makes sense.

Or keep doing what you’re doing and keep paying $150+/month. Your call.

Ready to compare plans? See current electricity rates for your address on ComparePower.

Looking for a specific kind of company? Check out our guides:

Frequently Asked Questions

What is the fastest way to lower my electricity bill in Texas?

Switching to a cheaper electricity plan is the single biggest lever. Competitive 12-month fixed plans ran about 12 to 15 cents per kWh in September 2026, and that three-cent spread is about $395 a year at average usage (1,096 kWh per month). This one change, which takes 15 minutes, often saves more than all the behavioral changes combined.

How much can I save by raising my thermostat 2 degrees?

DOE’s rule of thumb is about 3% off cooling costs per degree, so two degrees trims roughly 6% of what you spend cooling the house: about $5 a month on a $150 summer bill, about $9 on a $300 one. The bigger lever is the schedule. DOE says setting the thermostat back 7-10°F for 8 hours a day saves as much as 10% a year on heating and cooling, and 78°F is its recommended summer setting.

Do smart thermostats really save money?

Yes. Nest’s studies found about 15% savings on cooling and 10-12% on heating, and ecobee reports up to 26% on heating and cooling; in a heavy-AC Texas home that works out to roughly $150-250 per year. At $130-250 per device, payback is about a year, faster with a utility rebate.

Are free nights electricity plans worth it?

Only if you can shift 40-60% of your usage to nighttime hours. Free nights plans charge more per kWh during the hours that aren’t free, so work-from-home households and families with daytime usage often pay more than with standard fixed-rate plans.

How to Lower Your Electric Bill in Texas (12 Proven Ways)