When Will Home Heating Costs Decline?

With winter weather intensifying, homeowners in the U.S. are dealing with the problem of home heating costs. Recent years have seen a remarkable rise in energy costs, leaving many searching for answers and relief. Understand what affects home heating prices, the recent trends we’ve seen and strategies to keep your utility bills in check.

Different Kinds of Home Heating Fuel

Several fuels are used for home heating in the United States:

  • Natural gas heats 48% of American homes.
  • Heating oil serves 5% of homes.
  • Propane fuels another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels are still the primary source for creating electricity even with the surge in interest in renewable energy sources like wind and solar. 

What Affects the Rates of Fossil Fuels?

According to the above information, it’s clear that fossil fuels heat a vast majority of North American households. Supply and demand is the most significant factor causing price fluctuations. An increase in supply—triggered by higher production and storage rates—generally lowers prices, while an increase in demand—triggered by severe weather, a thriving economy and rising rates for alternative fuels—can cause prices to climb.

Exactly How Much Has the Cost of Natural Gas Risen?

Domestic natural gas production outpaced consumption starting in 2017, resulting in an overall price decline in all of 2018. Unfortunately, demand has increased significantly recently across all sectors, causing natural gas prices to reach heights not seen in more than decade.

In 2022, the average wholesale cost of U.S. natural gas surged to its highest price since 2008, attaining an average of $6.45 per million British thermal units (MMBtu). This surge represented a major leap of over 53% from the previous year, marking it as one of the steepest annual increases on record.

A number of factors led to the unpredictable rise and lack of stability of natural gas prices last year. In early 2022, production hiccups caused by freeze-offs and a substantial draw from natural gas reserves nudged prices up. Robust liquefied natural gas (LNG) exports to Europe and other regions, coupled with a spike in domestic demand caused by cold weather, stretched the price range even further.

In the spring of 2022, prices roared past $9/MMBtu, only to tumble by 40% following the fire and subsequent closure of the Freeport LNG export terminal. This incident sharply cut U.S. LNG exports and redirected more natural gas to storage. However, as the summer heat ebbed, prices climbed once more, reaching a peak in late August.

Shifting into the fall, an uptick in natural gas production and higher-than-average injections into storage saw prices fall closer to the five-year average. But, as temperatures went down, the demand for heating caused prices to ascend again.

When Will the Cost of Home Heating Fuel Go Down?

The changes in natural gas prices underscore the complicated interplay of factors influencing home heating fuel rates. As we look forward to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price changes and the prospect of cost-saving opportunities.

As of late 2023, prices have decreased from their previous highs thanks to robust production and relatively mellow temperatures. Even though demand continues to be steady, forecasters are predicting prices around $3.44/MMBtu this winter, providing some respite for individuals as we move through the heating season.

Tips to Trim Your Heating Bill

No matter how you heat your home or what prices are like, you can take several helpful steps to increase energy efficiency and lower your heating expenses. 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 at night to insulate your windows.
  • Boost attic insulation to stop heat from rising out of your home.
  • Invest in a smart thermostat that learns your routines and helps you save money.
  • Reduce the temperature on your thermostat when you’re away to avoid overheating an empty house.
  • Wear warmer clothes indoors so you aren’t forced to crank up the thermostat.
  • Schedule yearly furnace maintenance to keep your heating system in top shape.
  • Use a whole-house humidifier. Moist air feels warmer than dry air, so you feel more comfortable at a lower temperature.

Keep Cozy and Warm in the U.S. with Service Experts Heating, Air Conditioning & Plumbing

Nothing is more important to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and happiness in your home. Our work can also help reduce home heating costs, which is great news for your pocketbook. With ACE-certified technicians at the helm, you can expect quality, durable answers to all your comfort needs. The assurance of a 100% satisfaction guarantee means that if you’re not totally happy with our services, you can count on us to make things right.

As a company that prides itself on innovation, customer engagement and community involvement, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a meaningful difference in your life and sense of comfort. For more details of what you can expect with heating prices in the U.S. or personalized tips to help reduce your utility bills, contact the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.

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