Energy Costs &
Efficiency
Texas homeowners pay 50-70% of their annual electricity costs during four summer months — and most of that goes to air conditioning. Understanding what drives these costs and what can actually reduce them matters more here than almost anywhere else.
Why Summer Bills Spike
A typical North Texas home (2,000 sq ft, 3.5-ton AC) during July:
| Component | Value |
|---|---|
| AC runtime | 12-16 hours/day |
| AC power draw | 3.5-4.5 kW |
| Daily AC consumption | 50-70 kWh |
| Monthly AC consumption | 1,500-2,100 kWh |
| Monthly AC cost (@ $0.12/kWh) | $180-$250 |
Add baseline consumption (refrigerator, lights, electronics, water heater) of 400-600 kWh, and July bills reach $250-$350 for efficient homes — more for older equipment or poor insulation.
Why It's Not "Waste"
- Temperature differential: Maintaining 75°F when it's 105°F outside requires moving 30°F worth of heat continuously.
- Extended runtime: Texas ACs run 12-18 hours daily in summer. National average: 6-10 hours.
- Night recovery limits: When overnight lows stay above 80°F, homes never fully recover.
How to Actually Lower Bills
High Impact, Lower Cost
Thermostat setpoint
Each degree higher saves 3-5% on cooling costs
Air filter maintenance
Dirty filters increase energy consumption 5-15%
Seal duct leaks
$300-$700 cost, saves $100-$200 annually
Attic insulation
Pays back in 3-5 years if below R-38
Moderate Impact, Moderate Cost
Smart thermostat
Saves 10-15%, payback 1-2 years
Shade outdoor unit
Improves efficiency 5-10%
Window treatments
Reduce cooling load 10-20%
High Impact, Higher Cost
Equipment upgrade
10 SEER to 16 SEER2 saves 25-35% on cooling
Ductwork replacement
Major improvement for attic ducts
Texas HVAC Rebates
Utility rebates can reduce equipment costs by $1,000-$4,000.
Oncor (Dallas-Fort Worth Area)
| Equipment | Rebate Amount |
|---|---|
| Central AC (16+ SEER2) | $400-$800 |
| Heat Pump (16+ SEER2) | $600-$1,000 |
| Smart Thermostat | $75-$100 |
| Duct Sealing | $200-$400 |
| Attic Insulation | $200-$400 |
How to Claim Rebates
- 1. Before purchase: Verify equipment qualifies and rebate is available
- 2. Use participating contractor: Many programs require approved installers
- 3. Keep documentation: Invoice, efficiency ratings, permit (if required)
- 4. Submit within deadline: Most programs require submission within 60-90 days
- 5. Wait for processing: 6-12 weeks typical
Federal Tax Credits (Section 25C)
The Inflation Reduction Act (2022) expanded HVAC tax credits significantly through 2032.
| Equipment | Credit Amount | Requirements |
|---|---|---|
| Central AC | 30% up to $600 | Meets efficiency standards |
| Heat Pump | 30% up to $2,000 | ENERGY STAR certified |
| Furnace | 30% up to $600 | 97%+ AFUE |
| Heat Pump Water Heater | 30% up to $2,000 | ENERGY STAR certified |
Important Details
- • Credit, not deduction — reduces tax owed dollar-for-dollar
- • Must be primary residence
- • New equipment only, not repairs
- • Professional installation required for most equipment
- • Keep manufacturer certification and receipts
Stacking Example
Heat pump installation in Oncor territory:
- Base cost:$12,000
- Oncor rebate:-$1,000
- Federal 25C credit:-$2,000
- Net cost:$9,000
Shopping Texas Electricity
Texas's deregulated market means you can choose providers — but the complexity creates traps.
Rate Structures
- Fixed rate:
Locked price per kWh for contract term. Predictable but may miss market dips.
- Variable rate:
Changes monthly with market. Risky during extreme weather.
- Time-of-use (TOU):
Different rates for peak/off-peak hours. Can save if you shift usage.
Where to Shop
- Power to Choose
Compare Texas Energy Plans and Rates
- Shop before contract expires
Rates are typically lower during low-demand months
The "Free Nights" Trap
Plans advertising "free nights" often have hidden costs:
- • Higher daytime rates ($0.15-$0.20/kWh)
- • Minimum usage charges
- • Higher delivery charges
- • Credits that don't apply to AC usage
For most homes, AC runs during peak heat hours — exactly when "free nights" plans charge the most.
Articles in This Section
Summer Electric Bills in North Texas
Why your summer bills spike and what's normal
How to Lower Your Summer Electric Bill
Practical strategies ranked by impact and cost
Complete Texas HVAC Rebate Guide
Utility rebates by provider and how to claim them
Federal Tax Credits for HVAC (25C Guide)
IRA 2022 tax credits explained step by step
Texas Electricity Shopping Guide
How to shop rates in the deregulated market
ERCOT Grid & Your HVAC
Understanding Texas grid reliability and backup
Energy Costs FAQ
Common questions about Texas HVAC costs and savings
Still Have Questions?
Our HVAC experts are here to help with personalized answers for your specific needs.
Want to Reduce Your Cooling Costs?
Free energy assessment to identify savings opportunities and rebate eligibility.
Related Services & Areas
Explore our comprehensive HVAC services across North Texas
Need immediate HVAC assistance?
24/7 Emergency Service Available