How to create an energy-efficient home

If you’ve felt a bit of sticker shock when opening recent utility bills, you’re certainly not alone. Across the country, energy bills have increased significantly in recent years, with electric bills skyrocketing by close to 30% for many households since 2021. As a result, building an energy-efficient house has become a rising trend. If you already own an existing home, one way to lower your utility bills is by making energy-efficient renovations to your home.

Making eco-friendly upgrades will not only help keep your energy costs down, but they can also add substantial resale value to your property. You don’t need a complete overhaul to see results. Simpler energy-efficient methods like utilizing smart appliances and installing double-pane windows can make a meaningful difference. Let’s take a look at some ways you can make your home more energy-efficient to help save money on energy costs.

What is an energy-efficient home?

An energy-efficient home is one that uses less energy to run by reducing waste. Many homes, particularly older ones, use more energy than they actually need. Energy-efficient homes eliminate waste using modern technology and updated systems, which lowers utility bills and reduces air pollution. While your home might've come with appliances, they might be outdated or using more energy than necessary. There are a variety of minor updates and larger renovations that can make a big difference when it comes to your energy costs.

Here are some common systems and devices that tend to contribute the most to energy usage:

• HVAC systems: Your heating, ventilation, and air-conditioning systems tend to consume the most energy of all your home’s systems.
• Hot water heaters: A hot water heater can use electricity, gas, or solar thermal energy to heat water for the home and consume energy even when they’re not being used.
• Kitchen appliances, washers, and dryers: The appliances that cook and store food and wash your clothes consume a significant amount of energy – especially refrigerators and freezers.
• Lighting systems: Your home's lighting systems can also contribute a sizable amount to your electricity bill.
• Overall electrical systems: These are all the components that receive and transmit electrical power and typically include the breaker box, wiring, and outlets.

How to make your house more energy-efficient

While it might seem like an expensive or overwhelming endeavor, taking steps to make your home more eco-friendly can save you a significant sum over time. Here are some ways to make yours an energy savings home.

1. Do a home energy audit

Consider a DIY or professional home energy audit to assess how much energy each system of your home is using. That way, you can pinpoint what parts of your home are the best candidates for energy-efficient improvements. An energy audit can involve reviewing past utility bills, checking the exterior for cracks and gaps, and inspecting appliances, insulation, and other aspects of the interior.

Keep in mind that some electric companies offer this service entirely for free. Depending on the company and the specifics of the program, a free energy audit also can mean income-qualified efficiency programs and rebates.

2. Install solar panels

Solar panels convert sunlight into electrical energy in one of two ways: through photovoltaic (PV) panels or mirrors that essentially concentrate solar radiation.

In 2026, the average cost of solar panels was roughly $30,000, but this depends on factors like the type of solar panel and size. While this is a hefty price tag, federal and local incentives can help bring down the cost, allowing you to maximize your solar panel savings. According to EnergySage, solar panels can recoup their cost over 25 - 30 years of electricity savings.

A solar loan can also help fund this upgrade. While they’re similar to home improvement loans, solar loans are designed for just the purchase and installation of solar panels.

3. Unplug vampire electronics

You might be surprised to know how many appliances and devices are sucking energy just by being plugged in – even when turned off. They’re called vampire electronics, and they may be adding to your electric bill needlessly. Examples include any device that has an indicator light, clock, or remote control that can contribute anywhere from 5% - 20% to the average home electric bill. According to The Office of the Ohio Consumers’ Counsel, the average home has anywhere from 20 – 40 vampire electronics.

For instance, you may leave a toaster plugged in all the time, even though you only use it twice a week. Meanwhile, the appliance is using a small amount of energy just by being plugged into an outlet. To stop this invisible drain on your utility bill, we recommend unplugging power strips and appliances when not in use whenever possible.

4. Purchase Energy Star-certified appliances

Another way to optimize your home efficiency is to stick with Energy Star-certified systems and appliances. When a home system or appliance earns the Energy Star label, it meets energy-efficiency specifications outlined by the U.S. Environmental Protection Agency (EPA).

Here are some household appliances with this certification:

• HVAC systems
• Dehumidifiers
• Water heaters
• Kitchen appliances
• Washers and dryers
• Pool pumps
• Ceiling fans
• Computers, monitors, and TVs
• Smart thermostats
• Air cleaners

Household appliances that are Energy Star-certified might be eligible for special offers, rebates, tax credits, and tax deductions.

5. Install LED lighting

LED light bulbs consume 90% less energy than incandescent light bulbs. That’s because LED lightbulbs convert a much higher percentage of electricity into light instead of heat. While incandescent lighting emits light and heat in an omnidirectional fashion, LED lighting emits light in a specific direction.

In turn, LED lighting can use energy more efficiently. LED lighting can be found in the form of bulbs, recessed fixtures, and track lighting. Plus, LED lights can last up to 25 times longer than traditional incandescent bulbs, according to the U.S. Department of Energy.

Switching to LED lighting can make for one of the less costly green upgrade options. It can be as simple as swapping out lightbulbs in a few rooms, which can help save on energy costs.

6. Use spray foam insulation

Good insulation in a home helps keep it hot during the winter and cool during summer. Quality, proper insulation in your home means resistance to heat flow, which can reduce your heating and cooling bills.

Spray foam insulation is a liquid polyurethane foam that can in some ways be better than fiberglass insulation. For example, it can yield a higher R-value (the measure of an insulation material’s resistance to heat flow) for the same amount of thickness and can fit the smallest of cavities. Plus, it can save you up to 50% on electric bills.

While spray foam insulation can be more difficult and expensive for older homes versus a new build, it might still be worth it alongside other major renovations.

7. Update your windows and doors

Another way to reduce heat gain and loss is by updating your windows and doors. As a result, it can contribute to energy use savings for heating and cooling.

Window options include caulking and weatherstripping, storm windows, solar control films, exterior shading, or complete replacement. For better insulation, consider upgrading doors or adding storm doors.

8. Purchase smart home devices

Many Wi-Fi-connected smart home devices help you bump down your energy usage through monitoring, programming, and other controls.

Some common options include:

• Smart thermostats
• Smart lighting
• Smart plugs/power strips
• Smart shades
• Smart appliances

Besides saving on energy and costs, a smart home equipped with smart home devices can also mean greater convenience, peace of mind, and safety. It can also boost your home value.

9. Conserve water

Having running water in a home can be something we take for granted, but it requires a significant amount of energy. In fact, the amount of energy it takes to treat and deliver water that 10 houses use in a year is equal to the amount of power to keep a refrigerator running for 6 years.

Conserving water not only saves money on water bills but can also reduce energy consumption by using less hot water. To cut back on water usage, you can make some relatively easy changes, such as using water-saving showerheads, faucet aerators, a shower timer, or a toilet tank bag. Other ideas include buying water-efficient appliances and installing a rainfall shutoff.

10. Opt for energy-efficient landscaping

A lush green lawn can be a beautiful sight and could help boost your home’s curb appeal. Unfortunately, it can also require substantial water, electricity, and chemical use.

You might want to consider sustainable landscaping approaches and green architecture and lawn care options – particularly if you live in a dry climate. This can include collecting water in rain barrels for later use in the garden and using native plants that rely on rainwater. You can also plant trees that provide ample shade and make for a cooler home.

The right landscaping choices will depend on your lifestyle, preferences, and climate. For example, if you live in a temperate region of the country, you'll want to maximize shade in the summer and the warming effects of the sun in the winter. If you live in a hot-arid region, consider drought-resistant or native landscaping and plenty of shade to cool roofs and windows.

Are energy-efficient homes worth it?

Energy-efficient improvements to your home can mean a smaller environmental footprint and lower energy bills. Depending on the upgrades, you could also benefit from improved comfort and a higher resale value.

Some energy improvements are relatively inexpensive, while others can be a sizable upfront investment. For larger renovations or remodels, some potential financing solutions include:

• Energy-efficient mortgages
• Home improvement grants
• Fannie Mae’s Green MBS (mortgage-backed securities)

The Green MBS program encourages lenders to offer favorable financing terms for energy- and water-saving property improvements. Fannie Mae purchases these green loans and packages them as securities for environmentally conscious investors, which brings added liquidity to the housing market. This allows homeowners to borrow money at lower interest rates to pay for their eco-friendly home upgrades.

The bottom line: An energy-efficient home can save you money over time

Transforming your house into an energy-efficient home can help you combat rising utility costs while reducing your environmental footprint. Even practical steps like scheduling a home energy audit, sealing up drafts, and upgrading to modern smart home tech can help you cut down on your daily power and water usage. While larger renovations require an initial financial investment, the long-term savings on your monthly bills and the added boost to your property value make them well worth the effort. An eco-friendly home can help you live more comfortably and sustainably.

If you’re looking to buy an energy-efficient home, you can start your mortgage application online today.

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