Like most consumers, you’ve probably experienced growing frustration with the ever-increasing cost of goods. Staple purchases like eggs, milk, and gasoline have soared in price, leaving many Americans with financial struggles and immense concern over when inflation will cool. Home energy costs are no exception.
Utility costs have skyrocketed in the past two years, but analysts predict change is coming our way. To help illuminate the current state, we explore trends in electricity prices and what’s to come in 2023, plus ways you can make small changes to save on your next electricity bill.
Wholesale Power Prices
The United States Energy Information Administration forecasts that wholesale energy prices will drop throughout 2023 and continue to drop into 2024.
This shift is caused, in part, by the decreasing cost of natural gas. Providers can expect lower rates for wholesale power prices.
Additionally, renewable electricity technology continues to expand and become more accessible. The impact on the whole energy market means more affordable alternatives.
Will Consumer Electricity Prices Fall?
2022 brought massive price run-ups across many regions and industries. Gas, electronics, groceries, furniture, and more soared in price due to rising inflation. Now, those numbers are stabilizing. But as price hikes slow, it’s unclear if electricity prices will follow suit. Often, utility companies’ prices update with a substantial time lag.
While falling wholesale power price seems promising, they don’t necessarily translate to lower consumer prices. The price utilities pay for power could drop by over a third, but those savings will not automatically reach customers.
Additionally, liquified natural gas is a significant fuel for electricity generation. Natural gas is in short supply in the United States due to Russia invading Ukraine in the spring of 2022. Many European countries stopped importing oil and gas from Russia, and the U.S. continues to ship substantial amounts of supplemental natural gas to Europe. As such, average electric prices could rise by approximately 10% throughout 2023 and continue to rise into 2024.
Is There Anything You Can Do to Lower Electricity Bills?
Unfortunately, energy consumers can’t change electricity prices. However, you can take a few impactful steps to reduce your electricity bill.
The average person may not know how much electricity common household appliances use daily. While keeping your refrigerator cold takes surprisingly little energy, ensuring your home has consistent hot water can be a massive expense.
The best way to tackle this issue is to calculate appliance energy and determine which ones are the most energy-draining. Consider replacing electricity-guzzling appliances with energy-efficient alternatives to reduce your electricity bill.
Tax credits are available for homeowners upgrading to energy-efficient appliances, like heat pumps and upgraded electric panels. These credits can offset the cost of purchasing new appliances.
Installing solar panels for your home can help you become less reliant on the electric grid. If you generate your own power, you don’t need to worry about price increases in the electricity market. Home solar energy solutions like the DELTA Pro Solar Generator let you build a home energy solution according to your needs and budget.
Generous federal, state, and local tax breaks and incentives can help significantly defray the upfront costs of switching to clean, renewable solar power.
For example, the Federal Solar Tax Credit offers eligible consumers a tax refund of up to 30% of the purchase price of a solar power system.
If you opt for a grid-tied solar power solution, many municipalities have ‘buy back’ programs — also known as net metering — where providers purchase any extra electricity you generate to benefit other customers. Not only can a home solar energy system save you money, but you could make money in the long run!
Today, solar panels are available in many sizes and levels of flexibility with superior durability. EcoFlow has solar panels to fit your unique needs regardless of your energy needs and lifestyle.
Smart Home Power Solutions
Investing in a smart home ecosystem is an excellent way to stay ‘in the know’ about your energy usage and gives you user-friendly tools to reduce and regulate your consumption.
If you have a larger home and want to insulate yourself against unstable energy prices — and blackouts — you can also look into a Whole Home Backup Power Solution and go off-grid during peak electricity billing hours or even completely.
A straightforward way to cut your electricity bill is simply being conscious of your energy use and making small changes in your daily habits. Take shorter showers at lower temperatures. Unplug appliances when not in use, and turn off lights when you leave the room.
Set your HVAC system at a higher temperature when you’re out of the house, or throw on an extra blanket to keep you warm while you’re sleeping.
While these individual actions may have minimal effect, their collective impact can lead to significant financial savings.
In addition to upgrading appliances, consider investing in structural renovations for your home by increasing insulation, sealing cracks in doorframes, and weatherizing doors and windows during cold months. You can regulate your home temperature and reduce energy loss with a few strategic renovations.
Frequently Asked Questions
Your must-know questions about electricity prices—explained.
While wholesale electricity prices are decreasing, those savings will likely not pass on to consumers in 2023. In tandem with a shortage of natural gas in the U.S., energy prices are likely to continue rising in 2023.
While electricity prices are not likely to decrease anytime soon, there are concrete steps you can take now to limit your energy consumption and reduce your electricity bill.
EcoFlow offers various renewable energy products — including solar panels, portable power stations, and solar generators — perfect for these trying times.
And much better for the planet.