Home energy prices are soaring as demand for oil and natural gas continues to outpace supply. Russia’s war in Ukraine is also putting upward pressure on the prices of heating oil and gas.
From February to March, home heating prices nationwide jumped 26 percent, to $4.92 per gallon. Natural gas prices have come down in recent days but are still up 87.8 percent year over year. Americans are shelling out more money to heat their homes, just as they are paying more for gasoline and a bevy of consumer products. At 7.9 percent, inflation is at a 40-year high, and energy costs are up 25.6 percent year over year, according to the Consumer Price Index for February.
“Over the past 18 months natural gas prices have risen more than 500 percent,” says Lauren Urbanek, senior energy policy advocate at the Natural Resources Defense Council (NRDC). “Fossil fuels are really susceptible to price increases. That trickles down, of course, to the consumer, making people who heat their homes with natural gas and fossil fuels very susceptible to higher heating prices.”
Even with the country entering spring and, eventually, warmer weather, high home energy prices will persist for several more weeks, particularly for residents of the Northeast, which has the vast majority of heating oil customers. For budget-conscious homeowners, the good news is that there are ways to save, including the following.
Reduce your consumption
A surefire way to lower your home energy bill is to reduce your consumption. According to Energy Star, you’ll save 10 percent on your energy consumption for every 10 degrees you lower the temperature in your home. If you have a programmable thermostat, you can set it to do that automatically when you’re at work or asleep.
If you’re traveling, consider turning your water heater down to a vacation setting. You don’t need a 40-gallon tank of water heated to 120 degrees or more if you won’t be taking a hot shower for a few days. Remember to turn it back on when you return from your trip.
Shutting doors in unused rooms can also help you conserve heat. Heat will remain in the room longer, which means your system won’t have to pump out more hot air. If you have an oil-fired heating system, Energy Star recommends getting it cleaned and tuned annually, while a gas-fired one can be cleaned every three years. Regular maintenance will increase its life span and reduce heating costs.
Weatherize your home
Leaks and gaps around your windows and doors cost you money in energy. Fixing them won’t break the bank. That’s why Urbanek says to weatherize your home by sealing window cracks and gaps with caulk and reduce drafts by installing more or new insulation. That’s particularly true if you live in a house that was built over a decade ago, when energy efficiency wasn’t top of mind for builders. Uninsulated or under-insulated walls and attics can lose a large amount of heat. According to Energy Star, roughly 30 percent of a home’s heating energy literally goes out the windows. “About 80 percent of the housing units in the U.S. were built in 1999 and before. In that case, energy efficiency upgrades are going to be worthwhile,” Urbanek says.
If you are in the market to replace your oil or gas boiler, Urbanek says to consider an electric model such as a heat pump. The technology has improved in recent years, with both heating and cooling built into one system. “It’s much more efficient than the gas counterpart, which saves energy over time and it’s cleaner to run,” Urbanek says.
Older adults on a fixed income who are having trouble paying their utility bills, replacing a furnace or making energy improvements to their home can get financial help through the government’s Low Income Home Energy Assistance Program (LIHEAP). The program is funded on the federal level but administered by the states. To find out how to apply in your state, use this link.
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Forgo automatic deliveries of oil
When it comes to oil, people do not want to be left with an empty tank, particularly during winter. As a result, many U.S. homeowners will sign up for automatic deliveries with their oil company. The contracts typically last a year and ensure you receive oil before you run out. But they can also cost you way more when prices are soaring. “Folks who buy on a will-call basis, in which you basically buy oil as needed, historically pay 50 cents less than automatic delivery,” says Steve Williams, founder and president of FuelSnap. “In the past couple of weeks, some folks are paying over $2 more per gallon on automatic delivery.”
Why? Oil companies know that when prices soar, not all customers are going to pay their bills, so they pass on those increased costs to their automatic customers, Williams says. “Companies don’t want to do it, but when costs get this high and customers can’t pay, they have a little extra buffer,” he says.
This differs from locking in a rate for the year with your oil company. If you did so last June, when oil prices were lower, you look smart. If you locked in more recently, you could end up paying a higher price for the entirety of the contract.
Shop around for your energy
Just like you can get deals on goods and services when you shop around, the same goes for oil. Thanks to the internet and mobile apps, you can monitor the price of oil and place an order when the cost comes down. That requires you to stay on top of oil prices and your oil tank, but it can go a long way in saving you money. A rule of thumb: Don’t wait past a quarter of a tank to place your oil order, Williams says. That gives you enough time if there are any delays in getting a delivery out to your home.
Use a smart thermostat
Programmable thermostats let you automatically set your temperatures based on when you are in the home and active. A smart thermostat takes it to the next level by connecting to the internet. That means you can control your heating online or from a mobile app. Some smart thermostats even have built-in artificial intelligence that learns your behaviors and can create more efficient heating schedules for you. Energy Star has a list of smart thermostats that are approved by the government agency on its website.
Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national outlets, including The Wall Street Journal, Forbes, Investopedia and HerMoney.