7 Ways to Save on Winter Heating Bills

Home energy prices are heating up, even as winter's chill sets in.

Thanks to spiking fuel costs earlier this year, the average U.S. household will spend an additional 15% on home heating between October and March, or roughly $151 more than last year's bill of $986, according to the Energy Information Administration's Short-Term Energy and Winter Fuels Outlook, released Tuesday. Those households using home heating oil will be hardest hit, seeing their bills rise by 23%, or $449. Natural gas bills are expected to rise by 18% or $155; propane, 11% or $188, and electricity, by 10%, or $188.

But there is good news for already struggling consumers: "The economy is pulling down oil prices," Neil Gamson, an economist with the EIA points out, "and if that gloomy outlook continues, consumers should see the drop reflected in their [utility] bills." Crude oil closed at $90 Tuesday, well below its record high of $147 in July. That, in turn, has lowered heating oil, propane and natural gas prices.

Where you live can also help -- or hurt. According to data from the National Oceanic and Atmospheric Administration, temperatures nationwide are expected to be 2.4% colder than last year, but regional estimates vary from 6% colder in the Northeast to 2% warner in the Midwest.

Here's how to put the freeze on your home heating bills while still staying warm:

"Heating systems fail most often because they're neglected," says Maria Vargas, a spokeswoman for the government's Energy Star program. A system that doesn't produce enough warm air, or loses much of it to leaks en route to your rooms, can tack up to 20% onto your bill. Hiring an inspector (at a cost of $50 to $100) to examine your HVAC system once a year will more than pay for itself in energy savings.

While you're at it, drain your water heater to remove sediment that builds up over time, making the appliance less efficient, advises Greg Miedema, president of Dakota Builders in Tucson and vice chairman of the National Association of Home Builders' Remodelers Council. "Otherwise you're heating 10 pounds of sludge and a pound of water," he says.

The price you pay for fuel often depends on when it was purchased, says Gamson. If your home heating oil provider bought the bulk of its supply when prices were higher, it will take longer for your bill to reflect today's cheaper rate. With that in mind, it's important to shop around for the best rate. Households using heating oil or propane can select which company fills their tanks, while those in states where the electricity market is deregulated can also choose among electric and natural gas suppliers.

Don't let the air you're paying to warm escape through cracks around windows, doors and other fixtures. "Caulk is always a quick, easy fix," says Miedema. The $25 to $50 you'd spend on sealing products more than pays for itself -- a well-sealed home is up to 20% more energy-efficient, according to the EPA. Check out the EPA's do-it-yourself guide for advice on closing off air leaks.

Many older homes could use additional insulation, particularly in the basement and roof, says Vargas. Not only does insulation degrade over the years, but the latest options are also far more energy-efficient. If you can, hold off on any insulation upgrades until January, when the renewed Energy Efficiency Tax Incentives that Congress passed as part of the bailout kick in. That insulation project can yield a credit worth 10% of the total cost, up to $500.

Set your thermostat just one degree cooler for an eight-hour period each day during the winter heating season, and cut your bill by up to 5%, reports the Alliance to Save Energy. "A single degree isn't even that noticeable," says Rozanne Weissman, a spokeswoman for the group. By doing so, the average household saves $180 a year.

An insulation jacket for your water heater costs as little as $20, but can make a big impact, says Miedema. That's because it keeps the water heater from working overtime to keep standing water warm. By Department of Energy estimates, wrapping your water heater cuts heat loss in half -- knocking 4% to 9% from its operation costs.

Keep your shades open to let the warming sun in, and turn your ceiling fan to run reverse (clockwise). "That pushes warm air down from the ceiling," says Vargas.