Why Your Electric Bill Keeps Rising — and What Homeowners Can Actually Do About It

Same house. Same thermostat setting. Same two people running the same loads of laundry. The electric bill is higher than it was a year ago anyway, and last year’s was higher than the year before.

So are you running more stuff? Probably not. Nationally, households bought a little less electricity this June than last June, about 0.2 percent less, going by the federal Energy Information Administration’s numbers. Your usage likely held steady. It’s the price of each kilowatt-hour that moved.

18.34 cents per kilowatt-hour. That was the average U.S. residential price in June 2026, per the EIA. A year earlier it was 17.47 cents. That’s up 5.0 percent, and Maryland, Virginia, New York and Pennsylvania each saw more than 10 percent.

What does less than a penny do to a real bill? Picture a home that buys the national average, about 899 kilowatt-hours a month. On that house, the 0.87-cent gap comes to roughly $8 a month. Annoying, not ruinous. But few homes sit right on the average. In Maryland, a house using 1,000 kilowatt-hours paid about $25 more in June than it had a year before. Keep that up for twelve months and you’re out around $300.

Hawaii had it worst. Prices there jumped nearly 29 percent. A couple of states went the other way, too: in Florida and Connecticut, prices actually fell.

Don’t count on a break soon. For 2026 as a whole, the EIA expects the average residential price to land at 18.2 cents, which would be 5.2 percent above 2025. Its outlook for next year, issued in September 2026, puts it at 18.6 cents. Those are forecasts, of course, and the agency redoes them every month.

What follows covers three things: what’s pushing the price up, which part of your own bill grew, and which fixes still earn their keep now that the federal tax credits for solar and efficiency upgrades are gone.

What’s pushing the price up

Several causes are stacking on top of each other.

Demand is growing again. For years, U.S. electricity use barely grew. Not anymore. The EIA now forecasts record consumption in 2026 and 2027, rising nearly 2 percent a year, and it points to data centers and manufacturing. Data centers are the big new factor. Back in 2023 they used about 4.4 percent of the country’s electricity. By 2028 their share could be anywhere from 6.7 to 12 percent, says a Department of Energy report prepared by Lawrence Berkeley National Laboratory.

More demand raises the price of having enough power plants. If you live somewhere between New Jersey and Illinois, your power may come through PJM, the company that runs the regional grid for 13 states and the District of Columbia. Each year it holds an auction that pays power plants to be ready when demand peaks. By PJM’s own estimate, the auction for the year that began in June 2026 adds 1.5 to 5 percent to some customers’ bills. Prices in that auction ran high mainly because PJM expected peak demand to jump, driven largely by data center expansion, more homes and cars switching to electricity, and economic growth.

That cost gets spread across everyone on the system, households included. It’s one reason several of this year’s steepest increases, in Maryland, Virginia, Pennsylvania and Ohio, happened inside PJM’s territory.

The grid itself is being rebuilt. Utilities are replacing old poles, wires and substations and making power lines tougher against storms and wildfires. State regulators approve those costs, and they show up in the delivery portion of your bill, often as separate riders (add-on charges). You won’t see a line that says new poles, but you’re paying for them.

Fuel still matters. Natural gas is the largest source of U.S. power generation. When gas prices rise, the supply part of your bill follows within months.

How much more, in selected states

These are EIA average residential prices for June 2026 against June 2025, with the dollar change for a home using 1,000 kilowatt-hours that month. Monthly state figures are preliminary and get revised. If your state isn’t listed, the EIA’s Electric Power Monthly has a table with every state’s average price.

A state average hides a lot. Your own increase depends on your utility, your rate plan and how much you use in the hottest and coldest months, and two neighbors on different utilities can see very different numbers.

It also hides where the increase landed on the bill. Some of it’s in the supply price. Some is in delivery. And some sits in a fixed monthly charge and a string of small riders with names like “grid modernization” or “storm recovery,” billed no matter how carefully you use power. The bill itself rarely explains any of them.

You can’t do a thing about a capacity auction. You can find out which part of your own bill grew, and that tells you which fix is worth the trouble. That’s the next section, and all it takes is two bills and a calculator.

Find the line that moved

Pull up this month’s bill and the one from the same month last year. Most utilities keep 12 to 24 months online. Use the same month because weather swings usage more than anything else.

1. Compare kilowatt-hours first. If usage is within about 5 percent, the price moved and you didn’t. If usage jumped, look for a cause inside the house: a failing heat pump or AC compressor, a water heater element, a well pump, a dehumidifier running nonstop, or a new EV in the garage.
2. Divide the total by the kilowatt-hours. That’s your all-in price per kilowatt-hour. Do it for both bills. The comparison tells you what happened to your bill, which the state average can’t.
3. Split supply from delivery. Supply, sometimes called generation, is the power itself. Delivery, also called distribution or transmission, is the wires. In many states they’re separate lines, and supply is the part you may be able to shop for.
4. Look at the fixed monthly charge. It’s often called a customer charge or basic service charge. You pay it before you use anything, many utilities have raised it, and using less won’t touch it.
5. Read the riders. Storm recovery, fuel adjustment, grid modernization and efficiency surcharges usually run a few dollars each. Circle any that are new since last year.
6. Check the meter read. If the bill says “estimated,” that’s the utility’s guess. A run of low estimates followed by a real read produces one very large bill. You can ask for a corrected bill and a payment arrangement.

Fixes that cost little or nothing

Seal and insulate. Air sealing plus added insulation saves an average of 15 percent on heating and cooling costs, by ENERGY STAR’s estimate. Since heating and cooling are only part of what you spend on energy, that works out to about 11 percent of your total energy costs. Results vary by climate and house. Attic insulation, plus sealing around the attic hatch, plumbing vent pipes and the rim joists (the framing atop the foundation walls), usually comes first.

Look at the water heater. It’s one of the biggest electricity users in most homes. Setting the tank to 120 degrees and insulating the first few feet of hot water pipe costs almost nothing.

Can you shop for your electricity?

In some states, yes. Where there’s retail electric choice, including Texas, Ohio, Pennsylvania, Illinois, New York, New Jersey and Maryland, among others, you can buy the supply portion from a competing company. The utility still delivers the power and sends the bill.

In these states, comparing electricity rates from different suppliers can pay off. It’s also where people get burned. A few ground rules:

• Start with your state utility commission’s official comparison website. It lists licensed suppliers and the utility’s own default price, often called the price to compare.
• Compare fixed-rate offers over the full term. A low teaser rate that turns variable after three months often costs more over a year than the default.
• Check for a monthly fee, an early termination fee, and what happens when the contract ends. Many roll to a variable rate unless you act.
• Don’t let a door-to-door or phone salesperson rush you. Never hand over your bill or account number just to “check eligibility.”

If the best fixed offer isn’t clearly below the utility’s default price, staying put is a perfectly reasonable choice.

Bigger projects: solar, windows, heat pumps

The math changed for all three, because two federal tax credits are gone. The solar one, the Residential Clean Energy Credit, used to cover 30 percent of an installation. It isn’t available after December 31, 2025, the IRS says. The Energy Efficient Home Improvement Credit ended on the same date; it had paid part of the cost of windows, insulation and heat pumps. So if a salesperson promises you a 30 percent federal credit on a 2026 purchase, they’re working from an old script.

State and utility incentives are a separate story. They vary widely, and they haven’t all gone away. Some states still offer rebates, property tax exemptions for the added home value, sales tax exemptions, or credits for the power you send back to the grid. Check your state energy office’s website for the solar incentives where you live, and confirm each one with the agency that runs it.

Solar. Before incentives, the average runs about $2.60 per watt. For a 12-kilowatt system, that’s roughly $31,000. (Those figures come from EnergySage, a marketplace that tracks installer quotes.) EnergySage puts the average payback at about 10 years, but that may not fully account for the lost federal credit. If it doesn’t, payback without the credit will run longer. Your own number hinges on your electricity price, how your utility credits the power your panels send back to the grid, and your roof. At 30 cents a kilowatt-hour the case is far stronger than at 15.

You’ll want at least three quotes for the same system size, each with a price per watt so you’re comparing like with like. Every installer should also tell you the yearly production they’re projecting, the export credit rate they assumed, and the payback with no federal credit. If a number looks rosy, ask where it came from. Leases and power purchase agreements work differently. The company owns the panels, and you pay it every month, either for the equipment or for the power it makes. That’s where the escalator comes in (the price increase written into each year of the contract), along with what happens to the deal when you sell the house. And take a look at the roof. Less than 10 years left on it? Replace it first.

Windows. You’ll feel new energy-efficient windows right away, since the house gets more comfortable and quieter. The savings take much longer to show up. A whole-house replacement runs well into five figures, so it makes the most sense when the old windows are single-pane or failing anyway. Storm windows and air sealing get you part of the benefit for far less.

Heat pumps. This one’s worth a look if you heat with electric baseboards, an electric furnace or a heat pump that’s getting old, because a modern unit can cut heating use substantially. It’s also a major purchase. Collect several quotes, and call your utility about rebates before you sign anything; some of them require pre-approval.

If the bill is already past due

Call the utility before the due date rather than after a shutoff notice shows up. Most will offer a payment plan, and a lot of them run their own hardship funds.

Two federal programs run through the states. LIHEAP, the Low Income Home Energy Assistance Program, helps pay heating and cooling bills, and the Weatherization Assistance Program pays for efficiency work on the home. Eligibility is based on income and varies by state, and USA.gov links to each state’s office at usa.gov/help-with-energy-bills. There’s only so much money, and it often runs out. Apply early in the season.

Many states also restrict shutoffs during extreme heat or cold, or for households with a serious medical need. The rules differ by state, and your utility commission’s consumer line can tell you what applies.

Tonight, take this month’s bill and last year’s, divide each total by its kilowatt-hours, and write the two numbers on a sticky note on the fridge. If usage moved, look inside the house first. If the price moved, go after your rate plan, your supplier and your attic before you spend a dollar on the roof.