When Will Home Heating Costs Decline?

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

Varieties of Home Heating Fuel

Many fuels are used to heat homes in the United States:

  • Natural gas heats 48% of American homes.
  • Heating oil serves 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 renewed focus on renewable energy sources like wind and solar. 

What Are the Key Influences on the Price 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 driving price fluctuations. An increase in supply—triggered by greater production and storage rates—generally lowers prices, while a surge in demand—triggered by harsh weather, a flourishing 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 a general price decline in all of 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 surged to its highest point since 2008, reaching an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a tremendous leap of more than 53% from the previous year, marking it as one of the biggest annual increases in history.

Numerous factors contributed to the volatile rise and lack of stability 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 countries, paired with an increase in domestic demand because of cold weather, stretched the price range even further.

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

Going 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. However, as temperatures fell, the demand for heating caused prices to ascend again.

When Will Prices Cool Down?

The fluctuations in natural gas prices highlight the complex 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 opportunities.

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

Tricks to Cut Your Heating Bill

No matter how you heat your home or what prices are like, you can take several helpful steps to boost energy efficiency and cut your heating costs. Here are a few suggestions:

  • 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 each night to insulate your windows.
  • Increase your attic insulation to keep heat from rising out of your home.
  • Invest in a smart thermostat that learns your habits and adjusts the temperature accordingly to help reduce your energy usage.
  • Lower the temperature on your thermostat when you’re out to avoid overheating an empty house.
  • Wear warmer clothes inside your residence so you do not have to crank up the thermostat.
  • Plan 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.

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 well-being. Our services can also help lower home heating costs, which is great news for your wallet. With ACE-certified technicians at the helm, you can expect quick, long-lasting answers to all your comfort needs. Our 100% satisfaction guarantee means that if you’re not completely happy with our services, you know we will 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 of your residence. For more insights into heating prices in the U.S. or personalized methods to help minimize your utility bills, get a hold of the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.