New data suggests Americans are spending $532 billion a year on utilities, with electricity rates primarily to blame.

Why are utility rates so high?

New data from household expense management platform Doxo showed that the median U.S. household paid roughly $347 per month (or about $4,168 annually) for essentials, including electricity, gas, water, and waste. Per the report, these expenses accounted for around 5% of the average household income.

Doxo cited rising demand driven by AI data centers, combined with increased infrastructure investments and fossil fuel costs, as major contributing factors. 

The report noted that electricity costs rose more than 6% in the past year and nearly 20% over five years. Natural gas prices jumped nearly 14% in the last year, contributing to an approximate 15% increase in overall utility costs since 2020.

Though costs vary by region and service, electricity accounts for the largest share of essential household bills, averaging about $120 per month for most households. 

How clean energy combats high electricity bills

As utility costs climb across the country, clean energy is helping people to reduce these essential costs. Solar energy in particular allows households to generate electricity directly, reduce dependence on the grid, lower their utility bills, and lock in more predictable long-term energy costs. TCD's Solar Explorer has options to fit nearly every home and budget. 

One popular Solar Explorer option is Palmetto's LightReach. Instead of buying solar panels up front, consumers can subscribe for $0 down, allowing them to reduce their utility rates by up to 20%. 

Leasing programs like LightReach also allow homeowners to access federal clean energy incentives that individuals can no longer claim, and they pass the savings on through lower monthly rates.

If you're considering owning your system instead of leasing, trusted Solar Explorer partner EnergySage is an excellent option for learning about buying solar panels, finding available incentives, and comparing competitive bids from vetted installers. 

Either way, consumers benefit from the reliability of solar. When paired with battery storage, solar panels can keep your lights on during outages, power essential appliances, and make your home more resilient — particularly as extreme weather becomes more frequent.

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Why are rising energy costs concerning?

Understanding why energy costs are rising — and the options to lower them — is an important first step toward addressing the problem.

When electricity is generated using fossil fuels, rate payers are vulnerable to unpredictable costs driven by fuel price volatility, infrastructure issues, and extreme weather.

Most households still connect to the aging energy grid, largely reliant on coal and gas, to power their homes. 

However, the grid wasn't designed to handle current energy demands or climate conditions, which is why it's under increasing strain and prone to failures. 

With both the cost and reliability of traditional energy in flux, utility customers are now turning to cleaner, more resilient options to save money and for peace of mind.

Using efficient appliances to maximize energy savings 

Pairing solar with other electric appliance upgrades can supercharge potential savings. Efficient heat pumps and modern HVAC systems use far less energy than conventional systems, and they're even more affordable when powered by solar panels. TCD's HVAC Explorer can help you find the right system for your home and budget.

Plus, the free Palmetto Home app can show how you simple daily actions — from energy-saving habits to efficient home upgrades — can unlock up to $5,000 in rewards to put toward household improvements. 

Get TCD's free newsletters for easy tips to save more, waste less, and make smarter choices — and earn up to $5,000 toward clean upgrades in TCD's exclusive Rewards Club.