14 ways to lower your heating bill

Prices for heating oil and natural gas may have leveled off, but there are still some things you should do to cut your costs this winter. By Christopher Solomon

There's good news and bad news if you're a homeowner who's bracing yourself for the annual rise in winter heating costs: The bill won't hurt more this year, but it won't hurt much less.

The Energy Information Administration forecasts that the average household heating fuel expenditures this winter will decrease to $928 per household, down from $947 last year. This is the first price drop since the winter of 2001-2002. If you hope to save more than the projected $19, there are many steps you can take.

"There's a lot of things that the entrepreneurial homeowner can do, if he's a little bit handy," says John Ryan, team leader for commercial buildings for the Building Technologies Program in the Department of Energy's Office of Energy Efficiency and Renewable Energy, who has spent years thinking about efficiency in homes.

Here are more than a dozen simple steps you can take to slash your home's heating bill. Six steps cost nothing. Eight more cost under $100. Combine them, and you can often expect to save 20% -- and possibly much, much more -- on your home heating bill this winter. And some new federal tax breaks even sweeten the opportunity.

Grab that free, low-hanging fruit

First, the freebies. These strategies may sound simplistic, but they work well:

Turn down the thermostat. "The rule of thumb is that you can save about 3% on your heating bill for every degree that you set back your thermostat" full time, says Bill Prindle, deputy director for the nonprofit American Council for an Energy-Efficient Economy (ACEEE). Turn down the thermostat 10 degrees when you go to work, and again when you go to bed -- a total of 16 hours a day -- and you can save about 14% on your heating bill, says Prindle.
Use fans wisely. In just one hour, a hard-working bathroom or kitchen fan can expel a houseful of warm air, according to the Department of Energy. Turn them off as soon as they've done their job.
Keep the fireplace damper closed. Heat rises, and an open damper is like a hole in the roof. Also, limit use of the fireplace, since fires actually suck heat from a room, says Harvey Sachs, director of ACEEE's buildings program. Close off seldom-used rooms. And shut the vents inside.
Turn down the water heater. Lowering the temperature of water in the water heater to 115-120 degrees reduces power use often without a noticeable difference to the user, says Prindle.
Keep heating vents clear. Vents blocked by rugs and furniture prevent heated air from circulating efficiently.
Use curtains. Opening curtains and shades on south-facing windows during the day allows solar radiation to warm a living space; closing all curtains at night helps retard the escape of that heat.

Web sites on the topic abound, but one of the best is run by the Department of Energy.

Low-cost fixes

So you've put the easiest, and free, ideas to work. Now you can really make a dent in that heating bill with one cheap trip to a hardware store (Home Depot, for example, has all of the items below) and a few hours of work:

Block that leak! The small gaps surrounding windows, doors and other areas in the American house, taken together, are like a 9-square-foot hole in the wall, according to EarthWorks Group's "30 Simple Energy Things You Can Do to Save the Earth." Plugging them can save you up to 10% on that heating bill, and the materials will pay for themselves within a year, ACEEE says.

First, find the leaks: On a windy day, hold a lit incense stick to the most common drafty areas: chimney flashing, recessed lighting, sill plates, window and door frames, all ducts and flues and electrical outlets.

Buy door sweeps ($3-$10) to close spaces under exterior doors, and caulk ($2-$5 per roll, plus a $10 caulk gun) or tacky rope caulk to block those drafty spots around window frames. Apply weather-stripping ($3-$6 for up to 17 feet) to movable joints. Outlet gaskets ($10 for 10) can easily be installed in electrical outlets in a home's outer walls, where cold air often enters.

Keep your ducts in a row. A home that uses ductwork to move heated air can lose up to 60% of that air before it reaches the vents if the ducts are poorly connected, not well insulated and travel through unheated spaces such as the attic or crawlspace, says the government. "If you are a halfway savvy do-it-yourselfer, and your ductwork and heating and air-conditioning equipment are in the attic, you can do an awful lot to fix your system, at low cost," says Sachs.

First, look for obvious places in the attic, basement or in crawlspaces where ducts have become disconnected. Reconnect them, and fix places where pipes are pinched, which impedes flow of heated air to the house, says the Department of Energy's Ryan. Fix remaining gaps with tape, but don't use traditional duct tape, which deteriorates; instead, use metal-backed tape ($6-$10 per roll) or aerosol sealant. Where possible, wrap the ducts' exterior with special duct insulation ($8-$12 for 15 feet). Though the cost will be substantially more, it's a good idea to get a professional to help insulate ducts when electrical wires or lighting fixtures are nearby.

Other tips:

Swaddle water heater and pipes. Unless you've got a newer water heater that already has built-in insulation, covering your water heater with an insulated "jacket" ($17-$20) will keep costs down, especially if your heater is in an unheated place like a garage. Also, wrap water pipes ($1-$5 per 5-foot section) when possible, especially when they run through uninsulated areas.
Winterize windows. If you can't afford storm windows, put plastic film on those windows ($6 covers three windows) where a clear view isn't crucial, which will curb drafts and keep windows from rattling.
Buy a low-flow showerhead. A water-efficient showerhead (often less than $20) can use 25% to 50% less hot water, saving both on water and power bills, with little to no reduction in user satisfaction, says Prindle.
Buy a smart thermostat. If you're the kind of person who forgets to turn the temperature down at night and before work, but who doesn't mind programming things like the TV remote control, a "smart" thermostat ($50-$100) can be set to change the temperature for you.
Keep your furnace in shape. "It's amazing how often a heating or air conditioning unit stops working because a $3 or $15 air filter is clogged," says Sachs. Replace the air filter ($4-$16) according to manufacturer's directions and your heating system will operate more efficiently. Oil-fired boilers should be cleaned and tuned annually, and gas systems, every two years($100-$125). By maintaining your heating unit, you can save between 3% and 10% on heating bills, says ACEEE.
Look for other insulation opportunities. Some well-placed insulation, especially in the attic of older homes, can save a bundle ($7-$16, in rolls from 22-32 feet, depending on insulation value).

First, however, Sachs recommends going into the attic and looking for black-stained areas on the edges of the fiberglass. That's dust, and it shows where air is flowing up out of the living space. Sealing that area first will do more good than simply piling on more insulation.

By following all of the aforementioned strategies, the owner of an older home can likely save much more than 20% on heating bills, he says.

Thinking big

So you've spent the minimum and will now save a noticeable chunk of money. What else can you do in the future? Replace appliances, heating units, light fixtures and bulbs with high-efficiency replacements.

It costs money to save money, however. While an adequate vinyl window might cost $100-$150, a double-paned window with a low e-rating (that's a good thing) can cost $50-$100 more, says Nevil Eastwood, director of construction and environmental resources for Habitat for Humanity International in Georgia. "That adds up when you've got 15 windows in your house," Eastwood acknowledges.

Many experts therefore recommend buying high-efficiency windows and appliances as their predecessors wear out and you need to replace them anyway. Over time, the extra cost is recouped in improved efficiency.

"If your furnace is over 20 years old, you're probably paying far more to use it," says Maria Vargas, spokesperson for Energy Star, a federal-government-backed program that promotes energy efficiency and that lends its name to energy-saving products. Furnaces bearing the Energy Star label are about 15% more efficient than a standard conventional model, says Vargas.

A Chicago resident might pay an Energy Star premium of $1,400 or so on an average home furnace for that area, Vargas says, but the savings pay off the extra cost in three or four years.

Many utilities offer discounts or rebates on energy-saving products. Call and ask. Loans are also sometimes available for major improvements that will incorporate energy-efficient products or to purchase a high-efficiency home.

Thank you, Washington (sort of)

The Energy Policy Act of 2005 gives most of its $14.5 billion in tax breaks over the next 10 years to businesses, but it does throw a few bones to homeowners, says CCH Inc., a provider of tax and accounting information and software.

Homeowners who make energy-efficient improvements to existing homes can qualify for a 10% tax credit, up to $500. A credit is a dollar-for-dollar reduction in taxes, compared with a deduction, which only decreases taxable income. Improvements that can qualify include adding insulation, metal roofs coated with heat-reducing pigments, and energy-efficient windows, doors and skylights (though only $200 can come from windows).

Other items that meet certain criteria qualify for the credit with specific limitations, according to CCH: Advanced main air circulating fans can earn up to a $50 credit; some natural gas, propane or oil furnace or hot water boilers are eligible for up to a $150 credit; and qualifying electric and geothermal heat pumps qualify for up to a $300 credit. The credits can be taken on 2006 and 2007 returns, but the total credits for the two years cannot exceed the $500 maximum, says CCH.

The act also gives homeowners a tax credit for 30% of the cost of buying and installing residential solar water heating and photovoltaic equipment, says CCH. The maximum credit is $2,000. Solar water heaters for swimming pools and hot tubs do not qualify. The credit, which expires at the end of 2007, also applies to homeowners who install fuel cells to supply electricity. The maximum credit is $500 for each 0.5 kilowatt of capacity.

Still need help?

If you're really in a pinch to pay that heating bill, some agencies and governments offer help. For example, the city of Bellevue, Wash., near Seattle, offers discounts for low-income seniors and low-income disabled people and a tax rebate for all low-income customers who meet certain eligibility requirements. Contact your local utility or local Community Action Agency. National assistance for low-income families who want to make energy-saving home improvements is also available at the Department of Energy Web site.