What If Your Utility Bills Doubled?
Written by
Brooke Barley
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Rebekah Evans
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Millions of Americans could see higher utility bills come June, according to Environment America. This is due to the drastically rising cost of power supply materials. The report said that bills could up by 30%, but it really depends on the state. Prices could be more or less depending on how resources are looking come summer.
A report from Doxo revealed that Americans spend an average of $362 per month on utilities, which isn’t even accounting for times of inclement weather. A dramatic price increase on an essential like utilities could be dire for many Americans’ budgets. Here’s what experts said could happen and how to prepare for potential price hikes.
Where Would Americans Cut Spending?
It goes without saying that discretionary spending would have to decrease for families to afford their heightened utility bills. Things like going on vacation, seeing a movie and having dinner at restaurants would be decreased or foregone entirely. However, Doug Crawford, founder of Best Trade Schools LLC, added that some very necessary budget items could be cut from people’s budgets as well. “Families would start skipping preventative medical care. They’d ration groceries. They’d put off repairs on the only car they own. It would create a slow-moving financial emergency that builds month after month,” he said.
Look Into Government Incentives
If energy costs were to go up, Crawford recommended that homeowners look into government incentives that could help offset these bills. “The federal government currently offers substantial tax credits that can cover 30% of qualifying energy efficiency upgrades, up to $3,200 annually through the Inflation Reduction Act. These credits apply to everything from heat pumps and insulation to electrical panel upgrades and energy audits,” he explained. To qualify, Crawford commented that homeowners should keep their receipts and manufacturer certification statements (like Energy Star labels) and file IRS Form 5695 with their tax return.
Check for State Rebates
Depending on the state of residence, some people might be entitled to certain rebates if they install energy-efficient products like heat pumps. The rebates paired with the lower energy bills will help get budgets back on track. “A modern heat pump uses far less electricity than older systems and can cut heating and cooling bills by as much as 30% to 50%, especially in homes that previously relied on electric resistance or fuel oil systems,” Crawford said.
Additionally, Crawford recommended seeing if residents are in a state that offers the High-Efficiency Electric Home Rebate Program. Depending on income, some households may qualify to receive energy-efficient heat pumps, electric stoves, ventilation systems and insulation for free.
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