Bill shock, or getting an energy bill that’s higher than expected, can be incredibly frustrating! But there are ways to avoid it from happening again – and we’re going to tell you how. In this article, we’ll show you what uses the most energy in your house, and what you can do to save on your next electricity bill

A bar graph showing what uses the most energy in your house

1. Heating and Cooling Systems (40%)

Heating and cooling combined use the largest amount of energy in the average Australian home. They account for around 40% of household energy use according to

You can reduce this usage by:

  • Keeping your heating between 18-20 degrees,
  • Keeping your cooling over 25 degrees,
  • Keeping your blinds/curtains closed when heating or cooling, 
  • Making sure that draughts are covered,
  • and keeping doors closed to areas of the house that don’t need to be heated/cooled.


As with all appliances, it pays to look at the Energy Rating of the heating system you’re looking at – with a rating of 1 being the least efficient, and 10 being the most.

If you’re building a new house or remodelling an existing one, you should try to consider implementing passive design principles – essentially a design that works with your local climate. Not only will you save energy, but these types of buildings typically last longer and are more comfortable to live in!


Fun fact: Australia’s highest ever recorded temperature is 50.7 degrees recorded first at Oodnadatta on January 2, 1960, and most recently matched in Onslow, Western Australia on January 13, 2022! It’s safe to say, we’re no strangers to heat..

A desert town in South Australia
Oodnadatta, South Australia which in 1960, recorded the equal highest temperature in Australia of 50.7 degrees.

With its work cut out for it, it’s no surprise that A/C is one of the largest consumers of electricity during the hot summer months. And while you can save money on electricity costs by adjusting how long you keep it on, there are other things you can do as well to save money on cooling bills. Use ceiling fans and pedestal fans as much as possible. Fans can use up to 90% less energy than central A/C units and make a room feel 7-10 degrees cooler. It’s important to make sure they’re placed to maximise airflow throughout a room. Also, as with other appliances, switching to an energy-efficient air conditioner will pay dividends in long term savings. 

Once again provides a great resource for further reading on heating and cooling. 

2. Appliances (25%)

Appliances make up a huge portion of household energy consumption and therefore electricity bills – up to 25%.

Your fridge/freezer and TV are the biggest individual electricity users but there are a few ways to make big compounding savings over time. More than ever, manufacturers are focused on energy efficiency and making the best decision when purchasing one of these appliances time will pay dividends over time. Just by choosing energy-efficient appliances (make sure to look for a good energy star rating!) and turning appliances off at the wall rather than leaving them on standby, you can save up to $1000 per year. 

For more tips check out our 10 Tips to Save Money On Your Energy Bills post. 

3. Hot Water Systems (22.5%)

According to, hot water systems make up 22.5% of household energy use in the average home. Often this is due to old or poorly maintained hot water heaters that run inefficiently. You can significantly reduce this usage by setting the thermostat to 60°C for storage hot water systems and 50°C or less for an instantaneous system and turning your storage hot water system off if you go away. More information can be found in this ABC News article “How to reduce the amount of energy your hot water system burns through”.

Not all hot water systems are created equal, and considering the average hot water system lives for around 12 years, it’s worth taking the time to research your options.

  • Electric systems are the most common in Victoria. They are typically cheaper to buy at around $400-1800 (not including installation). They are the most expensive to run.
  • Gas systems were traditionally cheaper to run, but with rising fossil fuel prices and moves to reduce carbon emissions, gas may not be the best option in the long term. They are slightly more expensive than comparable electric systems, ranging from $900-2000. If you’re committed to a gas system, make sure you look for a new energy-efficient model.
  • Solar hot water systems represent a significant investment at anywhere from $4000-8000 dollars however government rebates will help with this cost.
  • Finally, heat-pump hot water systems. Heat pumps can be thought of as a form of solar as the energy they use to heat water comes from the sun! Typically, they use around 60-75% less energy than a conventional electric system and can save a household up to $600 per year. As of February 2022, Powerpal can arrange for a ZERO cost heat-pump system.

If you want more information on the best Heating and Cooling systems for your situation there are a number of great resources available online.

  • Victoria Residents can access this Sustainability Victoria guide which will help you make a decision based on cost & benefit.
  • NSW residents can access this great Hot Water Guide. 
  • South Australian residents can use this handy calculator to determine hot water heater costs. 

4. Lighting (7.5%)

Lighting costs represent a fairly small proportion of total household electricity use but it’s still important to practice good habits such as switching off lights when they are not needed. Just by switching off your lights at least one hour before going to bed, you could save up to 7 per cent (about $90) on your annual electricity bills. 

The best way to save money on your lighting is to switch to energy-efficient globes such as LEDs. LEDs are much more efficient and last a lot longer than halogen and incandescent globes. They’re even available for free through the Victorian Energy Upgrades (VEU) scheme. Find out more about the scheme over at the Victorian Energy Saver website.

5. Cooking (5%)

Cooking accounts for 5% of household electricity usage, however, those numbers have likely risen dramatically during the pandemic. According to a new study commissioned by Energy Consumers Australia, 30% of Australian households have bought a large appliance or white goods during the pandemic. 


We hope that this article helped shed an LED light on the main sources of energy usage within your house & provided some simple tips that go a long way to curbing bill shock.

One important investment to consider is a rooftop solar system. This is an investment, so you’ll have to determine whether it makes sense for your energy needs and situation. In general, if you’re paying a high electricity rate and can take advantage of net metering policies (which allow households with rooftop PV systems to sell excess electricity back to their utility company), then solar power can be worthwhile. Feed-in tariffs will depend on your supplier, as well as the amount of electricity on the grid. For more information on this, check out our article called “Why Rooftop Solar is About to Eat It’s Own Lunch“.

Monitoring exactly how much energy is being used by your household in real-time is easy with our Powerpal energy monitor. Currently available free for Victorians through the Victorian Energy Upgrades scheme.