When Will Home Heating Costs Decline?

With winter weather intensifying, homeowners in the U.S. are facing the pain of home heating costs. Recent years have seen a noteworthy jump in energy rates, leaving many looking for answers and relief. Understand what impacts home heating prices, the recent trends we’ve seen and ways 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 is the fuel used in 5% of homes.
  • Propane accounts for another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels are still the most used source for generating electricity in spite of the renewed focus on renewable energy sources like wind and solar. 

What Factors Impact the Cost of Fossil Fuels?

Based on the above information, it’s apparent that fossil fuels heat a vast majority of North American households. Supply and demand is the number one factor generating price fluctuations. An increase in supply—triggered by more production and storage rates—usually lowers prices, while a spike in demand—brought about by harsh weather, a thriving economy and rising rates for alternative fuels—can cause prices to soar.

How Much Have Natural Gas Prices Increased?

Domestic natural gas production outpaced consumption starting in 2017, resulting in a broad price decline in all of 2018. But, demand has increased significantly 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 surged to its highest price since 2008, attaining 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 in history.

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

In the spring of 2022, prices roared past $9/MMBtu, only to fall 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 to storage. But, as the summer heat ebbed, prices climbed again, hitting a high point in late August.

Going into the fall, a boost in natural gas production and higher-than-average injections into storage saw prices retreat closer to the five-year average. Yet, as temperatures dropped, the demand for heating caused prices to ascend one more time.

When Will Prices Go Down?

The changes in natural gas prices underscore the intricate 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 potential for cost-saving opportunities.

As of late 2023, prices have decreased from their previous highs due to robust production and relatively mild temperatures. Although demand remains steady, forecasters suggest prices around $3.44/MMBtu this winter, giving some respite for property owners as we move through the heating season.

Tips to Reduce Your Heating Bill

Regardless of how you heat your home or what prices are like, you can take several easy steps to improve energy efficiency and lower your heating costs. Here are a few strategies:

  • Seal drafty windows and doors with caulk and weatherstripping.
  • Use curtains to your advantage, throwing them open during the day for free light and heat and then drawing them closed at night to insulate your windows.
  • Add more attic insulation to stop heat from rising out of your home.
  • Install a smart thermostat that learns your behavior and helps you save money.
  • Reduce the temperature on your thermostat when you’re away so you aren’t spending money to heat an empty house.
  • Put on warmer clothes inside your residence so you don’t need to crank up the thermostat.
  • Schedule yearly 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 critical to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and happiness in your home. Our work can also help lower home heating costs, which is excellent news for your wallet. With ACE-certified technicians at the helm, you can expect fast, lasting remedies to all your comfort needs. Our 100% satisfaction guarantee means that if you’re not completely happy with our services, we promise to make things right.

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