When Will Home Heating Costs Decline?
With winter weather intensifying, homeowners in the U.S. are experiencing the problem of home heating costs. Recent years have seen a remarkable increase in energy rates, leaving many searching for answers and relief. Uncover what affects home heating prices, the recent trends we’ve seen and ways to keep your utility bills in check.
Types of Home Heating Fuel
A number of fuels are used for home heating in the United States:
- Natural gas heats 48% of American homes.
- Heating oil is the fuel used in 5% of homes.
- Propane accounts for another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels remain the most used source for generating electricity in spite of the surge in interest in renewable energy sources like wind and solar.
What Factors Impact the Rates of Fossil Fuels?
According to the above information, it’s apparent that fossil fuels heat a vast majority of North American households. Supply and demand is the most significant factor generating price fluctuations. An increase in supply—triggered by higher production and storage rates—usually lowers prices, while a surge in demand—triggered by harsh weather, a thriving economy and rising rates for alternative fuels—can cause prices to skyrocket.
How Much Have Natural Gas Prices Increased?
Domestic natural gas production outpaced consumption starting in 2017, resulting in a broad price decline through 2018. Unfortunately, demand has soared recently across all sectors, causing natural gas prices to hit heights not seen in more than decade.
In 2022, the average wholesale cost of U.S. natural gas hit its highest peak since 2008, hitting an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a tremendous leap of greater than 53% from the previous year, marking it as one of the sharpest annual increases ever recorded.
Multiple factors led to the unpredictable rise and instability of natural gas prices last year. In early 2022, processing hiccups caused by freeze-offs and a significant draw from natural gas reserves nudged prices way up. Robust liquefied natural gas (LNG) exports to Europe and elsewhere, combined with a spike in domestic demand caused by cold weather, stretched the price range even further.
In the spring of 2022, prices soared past $9/MMBtu, only to tumble by 40% following the fire and subsequent closure of the Freeport LNG export terminal. This incident considerably cut U.S. LNG exports and redirected more natural gas into storage. But, as the summer heat faded, prices climbed once again, peaking in late August.
Moving into the fall, an increase in natural gas production and higher-than-average injections into storage saw prices drop down closer to the five-year average. But, as temperatures went down, the demand for heating caused prices to rise once more.
When Will Fuel Rates Go Down?
The variations in natural gas prices underscore the intricate interplay of factors influencing home heating fuel rates. As we look ahead to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price trends and the potential for cost-saving measures.
As of late 2023, prices have decreased from their previous highs due to robust production and relatively mild temperatures. Although demand continues to be steady, forecasters suggest prices around $3.44/MMBtu this winter, offering some respite for property owners as we move through the heating season.
Ways to Trim Your Heating Bill
It doesn’t matter how you heat your home or what prices are like, you can take several helpful steps to increase energy efficiency and cut your heating bills. Here are a couple of strategies:
- Seal drafty windows and doors with caulk and weatherstripping.
- Use curtains to your advantage, opening them during the day for free light and heat and then closing them each night to insulate your windows.
- Increase your attic insulation to keep heat from rising out of your home.
- Buy a smart thermostat that learns your routines and adjusts the temperature accordingly to help reduce your energy usage.
- Reduce the temperature on your thermostat when you’re away so you aren’t spending money to heat an empty house.
- Wear warmer clothes inside the home so you do not have to crank up the thermostat.
- Schedule seasonal furnace maintenance to keep your heating system in peak condition.
- Install a whole-house humidifier. Moist air feels warmer than dry air, so you feel more comfy at a lower temperature.
Bring Comfort Home in the U.S. with Service Experts Heating, Air Conditioning & Plumbing
Nothing is of greater importance to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and safety. Our heating solutions can also help bring down home heating costs, which is great news for your wallet. With ACE-certified technicians at the helm, you can expect fast, durable remedies to all your comfort needs. Our 100% satisfaction guarantee means that if you’re not totally happy with our services, you know we will make things right.
As a company that prides itself on innovation, customer engagement and community participation, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a significant difference in your life and sense of comfort. For more insights into heating prices in the U.S. or personalized methods to help reduce your utility bills, contact the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.
How to Choose a Good HVAC System
When it comes to keeping your home comfortable during every season, nothing is more critical than picking out the right heating, ventilation and air conditioning (HVAC) system. This choice influences your daily comfort, monthly utility bills and all-around home efficiency. But, with so many system... Continue reading
Year-End HVAC Maintenance List
Once the air starts to get cold, you know it’s time to prepare your home for the cooler months ahead. Your heating system is critical to maintaining a cozy, warm environment. A well-maintained furnace delivers the comfort you crave while using a smaller amount of energy. Routine inspections also... Continue reading
2024 Furnace and Air Conditioning Trends
In the ever-evolving world of home HVAC, keeping up with the newest HVAC trends is imperative for homeowners looking to enhance their home’s comfort and efficiency. Going into 2024, the HVAC industry continues to innovate, bringing brand-new technologies and trends aimed at changing how... Continue reading