By ohm's law,
V= IR
Voltage, V is constant, for household, we get 120-110V in america, 230-240 V in India household.
Current, so depends on R, resistance.
I = V/R.
Resistance = ρl / A
Rho is resistivity, is a constant, as all wires are made of copper, generally.
L doesnot change, as for a house, you need a specific wire length to fully wire.
Now, you say area, A = 2.5 mm2. So, resistance decreases, as area is increased from 1 to 2.5.
So, energy is saved. More current will pass through wire, as resistance is less, and also heat produced on wire will be low, by joules law,
Heat, H = I^2 RT
.
R, decreases, so heat decreases. So energy is saved.
But why do we use 1mm^2 and not 2mm^2 or larger wires?
Because, copper is costly. More area means more copper, so more cost. Elements with resistivity lesser than Cu are silver, gold etc, but they are more costlier. So we use optimum thickness, which is 1 mm^2.