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How to Save Money on Your Heating Bills

Stay warm and cut costs with these discounts and home repairs

Senior couple hold gas bill and check radiator

iStock / Getty Images

En español | As temperatures drop, higher heating bills can lead to added financial stress for older adults across the country. According to the U.S. government's Energy Star program, the average American household spends more than $2,000 per year on utilities, mostly on heating and cooling costs.

Discount programs and home improvements can help you save on your utility bills in the winter and year-round. Here's what to know:

The Low Income Home Energy Assistance Program (LIHEAP)

LIHEAP is a federally funded program that helps an estimated 6 million low-income households each year with heating bills. The program can also help with cooling costs in the summer.

LIHEAP assistance is typically paid directly to your utility company or fuel dealer and is intended to cover a portion — not the entirety — of your yearly heating costs. The exact amount you may receive varies by state (each state receives a different amount of funding from the government) and individual factors, such as your household size and income.

In general, the program prioritizes the households that have the highest energy costs relative to income. States can set the maximum income eligibility for LIHEAP at either 150 percent of the federal poverty level (in 2019, that's about $25,000 a year for a two-person household) or 60 percent of your state's median income. You may automatically qualify for LIHEAP if you or a family member receives benefits like Supplemental Security Income (SSI) or certain veterans benefits.

States also determine the time period during which LIHEAP applications are accepted and the specifics of the application process. Some prioritize older adults by providing an early application window for those who are 60 and older. Most states award LIHEAP assistance on a first-come, first-served basis. Once a state gives out its funds for the year, no more assistance is available (even for eligible households) until the following cycle.

Depending on your state, you may also be able to use LIHEAP funds for weatherization projects, like installing insulation, fixing leaky windows or repairing a broken furnace. LIHEAP also provides crisis assistance intended for households that have received a utility shutoff notice. Water and sewer bills are not generally covered.

For more information, contact your state or tribe's LIHEAP office. You can also call the National Energy Assistance Referral (NEAR) hotline toll-free at 866-674-6327.


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State and utility company discounts

State-run programs and utility companies also can help older adults or low-income households with monthly bills. These programs vary in terms of eligibility requirements, application processes and the type of assistance they provide. Some reduce your monthly bill by a certain percentage or amount, while others cap bills at a percentage of your income or provide eligible customers with a lump-sum grant.

To find out about utility company discounts, call the number on your most recent bill. Your state energy office can tell you about any state-funded programs that might be available to you.

Budget billing

Also known as average or levelized billing, budget billing is not a true discount but a way for fixed-income households to pay the same amount for utilities each month (meaning you can avoid big seasonal increases in summer and winter). After averaging your past energy use, your utility company will charge you an equal amount each month based on your projected costs for the year.

You may end up owing money at the year's end if your usage outstrips the company's estimate. It's also a good idea to ask how you'll be reimbursed in the event you use less electricity or gas than the company expected. Weigh the pros and cons before making a decision, and be sure to ask if you'll be charged an extra monthly administrative fee for the service.

Weatherizing your home

Home repairs can help fix some of the root causes of sky-high heating bills, like drafty doors and uninsulated pipes. You can take on the cost of these projects yourself, or look into assistance programs like the U.S. Department of Energy's Weatherization Assistance Program (WAP), which funds weatherproofing projects for low-income households, with priority given to adults 60 and older and those with disabilities.

Energy Star, the U.S. government's energy efficiency program, also oversees a network of weatherization partners as part of its Home Performance with Energy Star initiative, which helps households of all income levels make weather-related improvements. Many states and utilities offer incentives to homeowners who complete the process.

In both programs, the process is similar. Repairs are carried out by approved contractors after a thorough home inspection and analysis of your yearly costs. The savings can add up: Households that complete the WAP process save an average of $283 a year in energy costs, while Home Performance with Energy Star projects can lead to up to $500 in annual savings.

State contacts for WAP and Home Performance with Energy Star can be found online.

Meanwhile, amateur-friendly home improvement projects, like sealing your chimney flue or turning down your water heater's factory settings, can help you boost your savings even more.

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