How to Reduce Your Heating and Cooling Bills

Man in sweater feeling cold adjusting room temperature with electronic thermostat at home.
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The cost of heating and cooling can increase utility bills considerably each year. According to Energy Star, nearly half of the energy you use in your home goes to heating and cooling. This means that you spend a large portion of money that could be used for your other bills paying for your utilities.

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If you’ve ever wondered how much it costs to heat and cool your home, you might be surprised by the estimates:

  • The U.S. Energy Information Administration (EIA) estimates that the average household heating costs from October to March (winter heating season) are just above $500 for natural gas, about $1,200 for both electricity and heating oil, and $1,300 for propane.
  • Data analytics firm Sense Labs estimates that cooling expenses add up to around $95 to $203 per month, depending on your region, for an average of $149 per month. Assuming that you’ll run your air from May to September — about four months — your cost could easily reach $600.

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The time frame that you run your air conditioner can significantly increase your electric bill.

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While these are just basic estimates of how much it could cost to heat and cool a home, there are tools out there to give you specific estimates. One in particular is Home Energy Saver, which is a government-sponsored website that helps you determine average energy costs based on your zip code. While it doesn’t break down heating and cooling costs separately, you do get an idea of the amount of savings you could enjoy if you upgraded to an energy-efficient home.

For instance, a Waller, Texas zip code showed average energy costs of $1,435, with efficient home costs considerably lower at $1,027. On the other hand, Antelope, Ore., showed a higher average energy cost of $3,017 with an efficient-home cost of $1,571.

Some other energy cost comparisons around the nation include:

  • Los Angeles – Average energy cost: $1,073; average energy-efficient home cost: $712
  • Chicago – Average energy cost: $1,637; average energy-efficient home cost: $1,072
  • Alexander City, Ala. – Average energy cost: $2,615; average energy-efficient home cost: $1,603
  • Abercrombie, N.D. – Average energy cost: $1,686; average energy-efficient home cost: $909
  • Poughkeepsie, N.Y. – Average energy cost: $3,191; average energy-efficient home cost: $1,810

If you want, the site also allows you to make energy-saving calculations based on the year your home was built, the square footage, type of foundation and much more.

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Ways to Cut Back on Heating and Cooling Costs

Different-sized homes may impose different energy costs. However, there are some surefire ways to cut those costs. According to Energy Star, there are a number of ways to cut back on your energy costs while still heating and cooling efficiently:

  • Change your air filter regularly: By changing your air filter every month during the heavy-use months (winter and summer), you could not only help the air circulate easier, but also avoid expensive maintenance issues, including early system failure.
  • Tune up your HVAC annually: Regularly tuning up your HVAC equipment could be compared to tuning up your car to improve your gas mileage. If you get a yearly tune-up, you could improve the efficiency of your heating and cooling system, thus helping it to not work as hard to do its job.
  • Add a programmable thermostat: If you know you’ll be away from home for extended periods throughout the day – or even for weeks at a time – you can install a thermostat that allows you to pre-program settings. This could save you nearly $200 a year in energy costs.
  • Seal your heating and cooling ducts: The ducts that move air to and from the furnace, air conditioner or heat pump often leak, wasting energy. If you seal those ducts, you could save as much as 20 percent on heating and cooling costs.
  • Consider Energy Star-qualified equipment: This government program has contracted with retailers to offer top-level appliances and equipment meant to cut your annual energy costs by using energy in your home efficiently. Taking the steps necessary to upgrade to Energy Star equipment could lower your energy costs so that you could enjoy the savings listed earlier in this article.

Make Your Money Work for You

If you plan to upgrade your home for energy efficiency, make sure to estimate the cost of the upgrade as well as the amount of any tax credits you could take advantage of along the way. Whatever you can do to help bills lower during the peak heating and cooling seasons could be a major bonus to you.

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Andrew Lisa contributed to the reporting for this article. 

Last updated: July 12, 2021

About the Author

Stacey Bumpus holds both her Bachelor and Masters degrees in Communications. After spending years in corporate communications, she discovered freelancing was really her cup of tea and fell in love with finding and writing about the latest financial news. Now, providing news and tips about banking, mortgages, taxes (and even logging her own efforts to save for retirement), she's not only fulfilling her lifelong passion, but also helping others manage their finances responsibly.

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