Banking on Energy Savings: How to Heat and Save in a Cool Economy

November 11, 2008

Washington, D.C. — With the downturn in the economy grabbing daily headlines, consumers across the nation are looking for ways to reduce living expenses and save money. While we can’t help with your slumping 401k, the American Council for an Energy-Efficient Economy (ACEEE) does have some useful tips to help ease the burden of winter energy bills.

“When trimming your household budget, cutting home energy costs is a great place to start,” says Jennifer Thorne Amann, Director of ACEEE’s Buildings Program. “Minor investments of time and money can pay off in reduced energy bills and improved comfort year after year.” Efforts to cut energy use are particularly timely now. The last few years have seen a steady increase in winter heating costs across the U.S. and this trend is likely to continue. The Energy Information Administration has projected a 15% increase in space heating costs compared to last year, due to both higher energy costs and the expectation of a colder winter.    

Of course, heating costs vary based on location, the fuel used for heating, and the specific characteristics of the home. The 50% of U.S. households using natural gas heating can expect to see an 18% jump in heating costs. Consumers heating with electricity (roughly 35% of households) are likely to see their heating costs rise by 10% this winter. The remaining U.S. households are split more or less evenly between heating oil (found mostly in the Northeast) and propane. Those using heating oil will be particularly hard hit with anticipated increases of up to 23%, while those using propane will pay about 11% more.

As always, the simplest way to reduce energy costs is to just use less. “Smart steps to cut your home energy consumption require no investment and provide immediate returns without sacrificing comfort,” states Jacob Talbot of ACEEE’s research staff. ACEEE recommends starting with the following for quick savings:

  • Set back your thermostat overnight and when you’re away from home; better yet, install a programmable thermostat to do it for you. Consumers can save about 2% on heating bills for every degree thermostats are turned down.
  • Lower the water heater’s thermostat to the lowest level that meets your hot water needs, typically 120°F (midway between the “low” and “medium” setting on many units). Each 10° reduction will save 3-5% on water heating costs.
  • Turn off lights and home office and entertainment equipment when not in use. Turning off lights, even for a few minutes, can save significant amounts of energy.
  • Open curtains and blinds during the day to let the sun warm rooms naturally, then close them at night to keep the heat in. Heavy drapes can help keep warm air in and reduce drafts around windows. If you have storm windows, be sure they are in place for the winter.
  • Don’t heat rooms that aren’t in use. Where feasible, close off vents in unused rooms and keep the doors closed. 

For a small investment, the following efficiency measures will deliver quick energy bill savings:

  • Clean or replace furnace filters monthly or as specified by manufacturer.
  • Get a tune-up for your heating system: every year for oil and every 2 or 3 years for other fuels.
  • Seal seams and gaps in exposed ductwork, and then insulate the ducts.
  • Seal doors with draft-reducing weatherstripping and door sweeps to cut down on spaces where cold air can enter the house.
  • Insulate hot water pipes leading from your water heater and install low-flow showerheads and faucet aerators.
  • Replace incandescent light bulbs with compact fluorescent bulbs.
  • Install temporary shrink-wrap storm window kits if you don’t have permanent storm windows.   
  • Check your attic insulation and consider improving the “R-value” to R-38.

If the time has come to replace your heating system, consider investing in energy-efficient, right-sized heating equipment with the help of a good contractor. If your existing system is more than 20 years old, you can yield savings up to 20-30%. And if yours is one of the many homes that suffer from high energy bills and extreme comfort issues, a thorough home performance diagnosis can help identify the problems and recommend solutions to cut your energy use and make your home perform at its best.

You can find all these tips and more in the condensed online version of our Consumer Guide to Home Energy Savings, 9th edition, found on our Web site at /consumer. The Consumer Guide is also available in hard copy for $22.95 ppd. via our Web site or from ACEEE Publications, 529 14th Street, N.W., Suite 600, Washington, D.C. 20045; 202-507-4000 phone or 202-429-2248 fax. It is also available at bookstores everywhere.

The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For information about ACEEE and its programs, publications, and conferences, contact ACEEE, 529 14th Street N.W., Suite 600, Washington, D.C. 20045 or visit