The cost of energy might not be the top item to consider when deciding on a new city or state to live in. But it’s something to keep in mind as energy costs across the US vary anywhere from $104 to $321 a month.
By the end of the year, that’s a $2,609 difference — not a paltry amount. So, if you don’t want to leave a family vacation on the table in the form of an energy bill, here are the most and least expensive states for energy.
Top 5 cheapest states
If you’re not looking to break the bank on energy each month, you’re going to want to go west. The top five cheapest states are located on the West coast and have an average cost of only $109 a month.
1. Idaho — Cheapest state for energy The cost of energy in Idaho is small potatoes, with the average monthly bill coming to $104, making it the cheapest state (including DC) in the US for energy. This totals to roughly $1,247 a year spent on average.
Looking at the monthly breakdown on costs, people in Idaho have the fifth-lowest outlay on the cost of electricity, with an average monthly spend of $94 and the lowest monthly spend on natural gas at just $9.
2. New Mexico Right behind Idaho is New Mexico as the second cheapest state for energy, with an average monthly cost of $105 and an average annual spend of $1,254. New Mexico is also the second cheapest state on average for electricity at $80 a month and the sixth cheapest state for natural gas at $24 a month.
3. Utah Add modestly priced energy to everything2 Utah is known for, as it is the third cheapest state for energy with an average monthly cost of $107 a month or an annual cost of $1,285. Utah is actually the cheapest state for electricity at $76 a month but only the 13th lowest for natural gas prices at an average of $31 a month.
4. Colorado Coming in fourth place is Colorado, with an average monthly energy bill of $112 or $1,341 annually. Colorado has the third lowest cost of electricity at $83 a month and the ninth monthly average bill for natural gas at $28.
5. Washington Coming in as the fifth cheapest state for energy is Washington, with an average monthly bill of $117 or $1,406 annually. Washington ranks as the sixth cheapest state for electricity at $94 a month and the fifth cheapest for natural gas at $22.
Top 5 most expensive states for energy in the USA
While the West coast dominated the cheapest states for energy, three out of the top five most expensive states are located in the Northeast.
1. Hawaii — Most expensive state for energy Hawaii tops the list as the most expensive state in the US for energy, with the average monthly energy bill coming to $321. At a whopping $3,856 a year, this amount is probably — ironically —how much it would cost for a couples’ getaway to the island paradise.
There is no competition for Hawaii with energy cost as it ranks as the most expensive state for both monthly electricity at $168 and natural gas bills at $152.
2. Connecticut Connecticut is the second most expensive place in America for energy, with an average monthly bill of $250, which comes to an average annual spend of $2,997. Of that monthly $250 energy bill, $151 is spent on electricity, which is the second most of any state. But as far as the cost of natural gas goes, Connecticut fares much better and comes in as the 34th lowest spend at an average monthly spend of $71.
3. Pennsylvania Pennsylvania comes in as the third most expensive state for energy, with an average monthly bill of $236, or an annual cost of $2,832. While Pennsylvania ranks middle (25th most expensive) of the table in regards to the monthly cost of electricity at $115, it’s the third most expensive state for natural gas at $92 a month.
4. Alabama Coming in the fourth spot is Alabama with an average monthly cost of $232 for energy or $2,789 annually. Alabama ranks as the third highest state for the cost of electricity with $150 a month and the eighth most expensive for natural gas at $81.
5. Massachusetts Rounding out the top five most expensive states is Massachusetts, with an average cost of $231 or $2,775 annually. It’s the 14th most expensive state for electricity at $126 and 11th most expensive for natural gas at $77 a month.
If you don’t plan to move to a different state to cut your energy cost, there are other ways to reduce your bill at home.
Buy energy efficient appliances. By switching to Energy Star appliances, you’ll use 50% less energy, which could help you save 5% to 10% on your energy bill. Switching to energy efficient light bulbs could help you save $75 a year, according to energy.gov.
Unplug your devices. Although you aren’t using it, if you keep your device plugged in it’s still using energy called phantom power. This type of energy makes up about 25% of all residential energy, according to a study by the Natural Resources Defense Council. For example, if you keep a phone charger plugged in, that may cost you $4 to $5 a year. To help cut costs, unplug your unused devices or buy a power strip.
Use off-peak energy hours. Check when your electric company’s peak and off-peak hours are. If you run your dishwasher and laundry during off-peak hours you could save money.
Finder also got some insight from alternative energy specialists. Ben Zientara, Solar Policy Analyst and Researcher for Solar Reviews provided the following information.
Ben Zientara Solar Policy Analyst and Researcher for Solar Reviews
What is the most cost effective energy source?
When it comes to utility-scale electricity generation, solar power is now the cheapest electricity in the history of the world. In fact, building new utility solar capacity is cheaper than operating existing coal plants, meaning there is no reason to continue burning coal to make electricity once enough solar can be built. That should hold true long into the future as solar costs continue to decline.
When it comes to the most cost-effective energy source for home consumption, in many cases, the answer is also solar, but there are some caveats. If homeowners can take advantage of the federal solar tax credit for installing a rooftop solar energy system, then in general, their total energy costs with solar will be cheaper than grid power over the 25-year life of the solar panels.
In some places with very high electricity costs like the east coast and California, home solar is much more cost-effective than grid power even without subsidies. Places like Massachusetts and New Jersey offer additional solar incentives that can help homeowners break even on the total cost of solar in just a few years, leaving them with potentially decades of free electricity from their fully paid-for solar panels.
In states with very low electricity costs, like much of the South and the Pacific Northwest — where hydroelectric power keeps rates low — home solar is still competitive with grid power, but it’s not quite the no-brainer financial move it is elsewhere. Still, people with very high usage in those states can save significant amounts of money over time by switching to solar power.
How do I make my house net zero?
As a practical matter, the only way to make your house 100% net zero is to generate carbon-free electricity from solar panels or other renewable generation like a small wind turbine, storing any excess energy in batteries to ensure you can use every bit. This can be logistically and financially difficult, though, because batteries are still fairly expensive and this kind of setup requires an oversized solar installation to be sure you have enough energy for several days with little to no sun.
Instead, you can install a solar panel system designed to meet your total usage, but which connects to the grid to send excess solar energy when it’s producing more than you need. Almost every state in the USA guarantees some sort of net billing or net metering for customer-generated solar power. That means your utility company offers you credit for that excess solar energy that you can use to offset the cost of energy you draw from the grid when the sun isn’t shining.
The best of these laws provide credit equal to the full retail cost of electricity, so if you send 100 kilowatt-hours to the grid, you get credit for 100 kilowatt-hours of grid power, and the usage charges on your bill can still average out to $0 over the course of a year.
What are some common mistakes people make when looking to go energy efficient to save on bills?
The first mistake is not getting a home energy audit before going solar. In most cases, it’s cheaper to improve your home’s insulation and avoid using electricity by replacing energy-intensive appliances, lights and devices than it is to pay for solar panels. Taking these steps can also result in a reduced cost to go solar when you’re ready.
Another mistake is not getting at least three quotes from different solar installers to compare not just cost, but warranties, equipment and customer testimonials and reviews. Also, consider that the panels will be in your roof for more than two decades, and make sure your current shingles or tiles won’t need to be replaced just a few years into owning solar panels. It’s possible but not cheap to remove panels for a roofing job, so it’s smart to plan ahead so you have no regrets later on.
Finally, as alluded to above, people don’t consider that their needs will change over time. Consider whether you’ll be getting an electric car or want to have a home battery sometime in the future, and to make sure you discuss those with a solar installer before you make the decision to buy. More people than you’d think end up wanting to add panels to an existing home solar array within a few years of first installing.
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To determine the average energy cost, we calculated the average monthly spend on the following items by residential customers for each state:
Monthly spend for each energy type was determined by the average monthly consumption and the average price for residential customers. For heating oil and propane, data was available regionally. All data was sourced from the US Energy Information Administration.
Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. When he’s not doing deep dives on data, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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