First Timers

How Your Home’s Electricity Works [+ Energy-Saving Tips!]

On a June afternoon in 1752, so the story goes, Benjamin Franklin flew a kite in a thunderstorm in Philadelphia. His hypothesis was that lightning contained electricity. Sure enough, his silk kite picked up ambient electricity from the lightning.

Ben was lucky — had lightning actually struck the kite, he would have been electrocuted. The risks of science.

Now, 270 years later, we use electricity in so many ways we’re not even aware of them all. Let’s take a brief look at how electricity works, how it gets to our homes, and how we can use it efficiently and safely.


What Kinds of Home Electrical Systems Are There?


Home wiring systems have improved dramatically over the years in terms of safety and efficiency. Older systems such as cleat wiring or casing and capping wiring, which you find in older homes, are obsolete today.


Conduit Wiring


Conduit wiring is a standard system for home wiring. Some localities require all new construction to use conduit wiring. In this method, conduits are attached to the walls with a two-hole strap and base clip at intervals, with wires laid inside them.

An advantage of conduit wiring is that it can be on the surface or concealed in wall slots or chiseled brick walls. It’s aesthetically appealing, easy for an electrical contractor to renovate, and very safe.

Drawbacks are that it’s an expensive process, flaws are hard to find, and it’s difficult to add additional conduit wiring in the future.




Most American homes use nonmetallic sheathed cables, the trade name for which is Romex.

Sheathed cable is relatively inexpensive, convenient, and easy to run, but it’s not as flexible as conduit.

Any electrician should be able to tell you which system your home uses. It doesn’t make much difference unless you’re building and want to discuss price and efficiency considerations with the contractor. The National Electrical Code governs safety regulations for home and commercial construction.


Where Does House Electricity Come From?

electrical power lines


Electricity is “born” in generating stations, usually powered by coal, wind, water, or natural gas. However, some places may use hydroelectric or nuclear power.

Basically, as large turbines spin, they create kinetic energy. A shaft between the turbine and generator catches this energy, turning it into electric current, and voilà — electricity.

It still has a long way to go and a few stages to pass through before it’s suitable to charge your iPhone, though. After it’s generated, the electricity goes to a transmission substation. At the substation, its voltage is significantly increased so it can reach its final destination (which could be hundreds of miles away).


How Does Electricity Get to My House?

After the voltage increases, electricity travels to another substation closer to the end user (that’s you).

Providers lower the voltage so the electricity can be safely transmitted along smaller regional power lines until it reaches your neighborhood. It goes to the smaller transformers you see on poles or those big green boxes called pad mount transformers. Their function is to lower the voltage again, so it’s safe enough for your home.

The electrical supply enters your home at the meter, which measures how much you use.

Electrification starts working at the service panel in your basement, garage, or elsewhere. This is where all the breakers and fuses keep your home wires from overloading. From there, it goes to all the outlets and appliances in your home.


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Which Electrical Appliances Are the Most Expensive To Run?

Now we get practical. We’ve gone over the generation and transmission. Great. Go back to that meter for a minute, which determines your monthly electrical services bill.

How can you get it any lower?

The rule of thumb is anything that generates heat is more expensive to run. And, generally speaking, newer appliances are more efficient than older models, using less electricity to do the same job. The question is how much more efficient and whether it makes sense for you to run out and buy all new appliances every year.

And the answer is: probably not.


What Are the Big Electricity Eaters on My Bill?


Big things — and big things that produce heat — likely account for half of your monthly bill. These are space heaters, hot water heaters, furnace fans, boiler circulation pumps, heat pumps, cooling systems, etc.

Of these, you have the most variable usage control over space heaters, hot water heaters, and cooling systems.


Space Heaters

Their only job is to produce heat, and they consume a lot of electricity doing so. Running space heaters is easily the quickest way to raise your home’s electric bill. In colder areas, space heaters can account for 30% of monthly electric bills.

How to save money with space heaters?

Throw on another sweater. Seriously, the better your insulation is, the less you’ll need to run space heaters, and the lower your electric bill will be.

Having insulation is good, but how often do you check and repair it? It might pay to spend an afternoon doing just that.


Hot Water Heaters

Next to space heaters, water heaters generally account for most of your home’s electric bill (unless yours is gas, of course), sometimes as high as 14%. Plus, space heaters are seasonal expenses, whereas hot water is year-round.

The warranty on a hot water heater is typically five to six years, do you know how old yours is?

You could upgrade to a tankless hot water heater, where the water heats on-demand rather than being kept hot while sitting in a tank. These are ideal if you plan on being in your house a long time and you (or your teenagers!) take really long showers.

Tankless models cost about three times as much as conventional tank heaters to buy and install. However, they never run out of hot water, use less energy to run, and last significantly longer than tank heaters.


Solar Water Heaters

Solar hot water heaters are another option if you have the roof space. They’re more environmentally friendly — but watch the cost. Be sure you get a full accounting of the cost and under what conditions they work before installing a solar hot water system. They make much more sense in some places (i.e., sunny locations) than in others.

A solar water heater comes with an added incentive — they can qualify for tax credits!


Cooling Appliances

Depending on the climate and season, these can chew up 11% of a total energy bill. We can’t overstate the importance of updating insulation and weather stripping to retain the air you’re paying to cool down or heat up.

Those are the heavyweights — big things and things that produce heat. The rest of what’s on your electric bill is small potatoes in comparison.



Generally, these account for about four or five percent of your energy bill. Unless your insulation is in really bad shape and it’s constantly running to keep your food cold. This is one appliance where it might pay to replace with a high-quality energy-efficient model.


Electric Stoves, Ovens, Range Tops

Yes, these generate heat, but their usage times are relatively low. Unless you’re baking all day every day in an electric oven, they’re not a significant chunk of the monthly power bill.


Clothes Dryers

Again, they generate some heat, but not as much as you might think. They’re usually slightly less than your fridge’s total monthly cost. Line drying, when possible, is a great idea, not least because the more you line dry your clothes, the longer they last (what do you think lint is?).



No need to yell at everybody to turn off the lights if they leave a room; electric lights are rarely more than three percent of your monthly bill.

You can look into smart lighting systems, but they’re pretty expensive compared with how much money you save on electricity. For someone who just can’t bear the sight of a light on in an empty room, they’re a great peace of mind investment. Find a Smart Home Pro near you to go see a smart lighting showroom in person!

And, of course, you can always upgrade to using energy-efficient lightbulbs in your ceiling fans and lamps.


Home Entertainment, TVs, Music, Computers, Hair Dryers, Etc. 

These rarely account for more than two or three percent of your monthly electric bill. If you’re looking to save serious money on power, don’t bother sacrificing your TV or computer time.

Other items that don’t cost much to run individually include:

  • Pool heaters
  • Spa heaters
  • Electric grills
  • Electric lawnmowers
  • Backup generators
  • And anything else with a motor

Still, with their powers combined, these items can add up to 20-25% of a total electric bill.


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What is “Phantom Load”?


close-up of a hand plugging a cord into an electrical outlet in a home

Ah yes, the phantom load, or “vampire electricity,” question:

Do things plugged in use electricity even when they’re not actually on?

Some do, but they don’t add up to much. They rarely significantly affect your bill — the monthly phantom cost is around five bucks for an average house.

To cut down on that phantom energy, you can group appliances onto a power strip you turn on and off. You can even look into smart strips if you’re intent on saving every nickel possible off your power bill.


Where is Phantom Load Happening in My House?

Phantom load includes anything with a light that stays on when turned off. TV, DVD players, video game consoles, satellite boxes, and stereos all have to keep a tiny bit of electricity flowing so they can turn on when you tell them to.

Home office stuff like power strips, computers, monitors, and printers will draw phantom load. In the kitchen, phantom load comes from appliances with digital displays like coffee makers, microwaves, toasters, or mixers.

Chargers for phones, Bluetooth speakers, and power tool chargers draw power so they can be ready for work. Fully-charged phones still draw power when plugged in, even in standby mode. That’s a lot of items, but they all add up to a small fraction of your monthly power bill.

If you’re looking for noticeable savings, don’t bother unplugging the coffee maker. You’ll just have to keep resetting the clock when you want to set morning brew times. All the plugging and unplugging is more hassle than it’s worth.


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What’s an Energy Audit?

It’s good to perform an energy audit once a year or so. These are usually DIY, but if you have a large old house with many appliances, it might pay to hire a pro, but you can usually do quite a good job by yourself. Done right, an energy audit can show you how to save anywhere from 5-30% on monthly bills.


How to Perform an Energy Audit Yourself

Everybody has a favorite system of performing an energy audit. Yet, they all start with getting copies of past bills and noticing high and low usage times to identify what causes unusually high or low swings.

During an audit, you should:

  • Inspect and repair insulation
  • Look for any indoor air leaks (and seal them!)
  • Check your windows and consider more energy-efficient options
  • Clean or replace filters on heating/cooling units

Changing appliance settings, upgrading kitchen appliances to energy-efficient models, shorter showers, or changing your shower head are things an audit might recommend.


If you’re all about household DIY, check out our other homeowner tips:

How to Caulk Trim  |  DIY AC Repair  |  How to Fix a Stuck Door 


What Are Some Electricity Safety Tips?

Most of these are common sense, but good reminders:

  • Short cords on coffee makers and tea kettles prevent children from pulling them down and getting scalded
  • Put plastic safety plugs over outlets you don’t use much
  • Don’t overload extension cords or outlets by plugging in multiple strips
  • Make sure your appliances have enough airflow to cool down
  • Watch for frayed cords and replace them as needed
  • Check lamps and light fixtures to ensure you have the correct wattage of bulbs
  • If there’s an electrical emergency, either unplug the item or, if you know where the main circuit breaker is, quickly shut it off
  • Do not throw water on an electrical fire; use a fire extinguisher or smother it with a blanket
  • Electrical cords under rugs and carpets can spark fires
  • Be careful when using electrical appliances in the bathroom (i.e., keep hair dryers from coming into contact with water)




There’s a lot to think about when it comes to your house’s electricity. From safety to money-saving tips, we hope this article helped light your path!