When Will Home Heating Costs Decline?

With winter weather hitting hard, homeowners in the U.S. are experiencing the challenge of home heating costs. Recent years have seen a remarkable jump in energy rates, leaving many in search of answers and relief. Understand what impacts home heating prices, the recent trends we’ve seen and tips to keep your utility bills in check.

Types of Home Heating Fuel

Several fuels are used to keep homes warm and cozy in the United States:

  • Natural gas heats 48% of American homes.
  • Heating oil heats 5% of homes.
  • Propane is used in another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels continue to be the main source for making electricity in spite of the surge in interest in renewable energy sources like wind and solar. 

What Affects the Cost of Fossil Fuels?

Considering the above information, it’s clear that fossil fuels heat a large majority of North American households. Supply and demand is the number one factor causing price fluctuations. An increase in supply—triggered by more production and storage rates—usually lowers prices, while a surge in demand—triggered by harsh weather, a booming economy and rising rates for alternative fuels—can cause prices to soar.

Exactly How Much Has the Price of Natural Gas Gone Up?

Domestic natural gas production outpaced consumption starting in 2017, resulting in a general 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 reached its highest point since 2008, reaching an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a major leap of over 53% from the previous year, marking it as one of the sharpest annual increases ever recorded.

A number of factors led to the unpredictable rise and instability of natural gas prices last year. In early 2022, production 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 other regions, combined with a spike in domestic demand because of cold weather, stretched the price range even further.

In the spring of 2022, prices roared past $9/MMBtu, only to drop by 40% following the fire and subsequent shutdown at the Freeport LNG export terminal. This incident drastically cut U.S. LNG exports and redirected more natural gas into storage. However, as the summer heat faded, prices climbed again, peaking in late August.

Moving into the fall, an increase in natural gas production and higher-than-average injections into storage saw prices retreat closer to the five-year average. But, as temperatures dropped, the demand for heating caused prices to rise again.

When Will the Cost of Home Heating Fuel Go Down?

The fluctuations in natural gas prices underscore the intricate interplay of factors influencing home heating costs. As we look ahead to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price patterns and the prospect of cost-saving options.

As of late 2023, prices have come down from their previous highs thanks to robust production and reasonably mellow temperatures. While demand continues to be steady, forecasters suggest prices around $3.44/MMBtu this winter, providing some respite for homeowners as we move through the heating season.

Tips to Trim Your Heating Bill

It doesn’t matter how you heat your home or what prices are like, you can take several practical steps to boost energy efficiency and lower your heating expenses. Here are some suggestions:

  • 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 drawing them closed at night to insulate your windows.
  • Increase your attic insulation to prevent heat from rising out of your home.
  • Buy a smart thermostat that learns your behavior and adjusts the temperature accordingly to help reduce your energy usage.
  • Dial down the temperature on your thermostat when you’re out so you don’t pay extra to heat an empty house.
  • Don warmer clothes inside the home so you do not have to crank up the thermostat.
  • Plan annual furnace maintenance to keep your heating system in top shape.
  • Set up a whole-house humidifier. Moist air feels warmer than dry air, so you feel more comfy at a lower temperature.

Make Your Home 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 well-being. Our heating solutions can also help lower 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 company’s 100% satisfaction guarantee means that if you’re not truly happy with our services, we promise 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 positive difference in your life and enjoyment in your home. For more information about heating prices in the U.S. or personalized tips to help reduce your utility bills, reach out to the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.