When December rolls around, the decorations go up at Peter Hoffman's home.

"The holidays mean a lot to my family and I," said Hoffman, an Energy Efficiently program evaluation analyst with National Grid. "It's a long standing tradition. We have a beautiful little girl who loves looking at the lights and talking about them and it's very important to us."

But "the most wonderful time of the year" is also the costliest for many.

What You Need To Know

  • According to the National Retail Federation, people are projected to spend an average of $902 on the holidays this year

  • The type of lights used in decorations play a big role in energy bills

  • LEDs cost more upfront, but will save you in the long run

According to the National Retail Federation, people are projected to spend an average of $902 on holiday shopping in 2024. This record high includes gifts, food and decorations.

And the spending doesn't stop when the shopping bags come home.

"My energy bill does go up in the wintertime, especially around the holidays," said Hoffman. "I'd say it increases by about $50 to between $150 and $200. That's certainly higher than I would normally like it."

The type of lights play a big role in energy bills.

For a 100-light string with 6 hours of usage per day, using LED instead of incandescent will save you almost $20 per season.

Based a 100-light string with 6 hours of usage per day at $0.15/kilowatt hour, the cost of operating C-9 incandescent bulbs is $0.63, while C-9 LED is $0.09.

"Look at the things that you are using and see what the draw is on them; sometimes that's on their label," said Patrick Stella, a spokesperson with National Grid. "The LED lights that they have now are much better energy wise than the older, larger bulbs."

Hoffman has learned lots of tips to keep his costs low without sacrificing any sparkle.

"If you're somebody who's unwilling to get rid of your incandescent holiday lights because it's hard to get rid of something that's still functional, try to make sure that all the light to use outside are LEDs," said Hoffman. "LEDs function very, very well in the cold and the incandescent lights let off a good amount of heat. You don't want that heat to be put on the outside because it's just wasted."

He also turns down the thermostat and keeps the heat from escaping with an attic hatch cover.

Hoffman says he saves $50 to $100 a month, cash he happily spends on a different type of holiday energy. 

"If i'm being honest, probably Starbucks," said Hoffman.