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3 ways to save money on your home heating bills

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Winter is coming, and soon millions of Americans will find themselves steeped in end-of-the-year traditions like gift exchanges, holiday dinners, and watching their home heating bills spike.

Earlier this year, a spokesperson from the Environmental Protection Agency told Grow that the average U.S. household spends around $2,000 per year on utilities, which includes electricity, gas, water, and heating bills. Around 30% of that total goes toward heating costs, so the average household is paying around $600 annually for heat.

Depending on where you live, heat could cost you a lot more: Your needs will be vastly different if you live in Bemidji, Minnesota, as opposed to San Diego, California.

Along with geography, how your home generates heat is the biggest factor in determining how much you'll pay. Most homes in the U.S. use either natural gas, electrical, or petroleum-powered furnace systems. Steven Downey, President of Pennsylvania-based Smart Touch Energy, an online platform that helps connect customers with heating oil dealers, says that costs for those using petroleum-based furnaces can vary substantially.

In the Northeast, he says, the "average consumer uses roughly 550 gallons [of heating oil] per year."

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With average heating oil prices hovering around $3 per gallon as of November 2019, according to data from the Energy Information Administration, topping off the typical 275-gallon furnace tank would cost roughly $825 — not including fees and delivery charges. Refilling it twice per year, and using 550 gallons, would add up to $1,650.

The cheapest option, at this point, may be natural gas. According to last year's estimates from the Massachusetts Department of Energy Resources, heating 1,861 square feet (the average living space in a New England home) would cost $983 with natural gas, $1,642 with heating oil, and $4,511 with an electric resistance heater.

No matter where you live or how you keep your home habitable in winter, there are probably ways you can reduce your bills, possibly even by a lot. Here are a few smart moves to try.

1. Tune-up your furnace system early in the year

Your home's heating systems require maintenance and repair to ensure they run efficiently. Downey recommends, particularly for those using petroleum-based furnaces, to get your system tuned-up and cleaned out once per year. "Making sure that your furnace is running at 70%, 80%, or 90% efficiency," he says, "can make a big difference in how much [fuel] you're using and how much heat you're producing."

If you want to save money, do the tune-up once winter is over, when demand for HVAC technicians is at a lull. "By doing it in the spring, the majority of the time," Downey says, "companies will offer some sort of special price. Typically, you can do it cheaper in the spring."

2. Invest in upgrades

If you feel up to some DIY projects, you may be able to save real money by making efficiency upgrades to your home.

Salvador Nobre Veiga, a 32-year-old stock trader living in Pennsylvania, made significant upgrades in his home that resulted in $750 annual savings. All told, he says, he invested $1,200 in upgrades that will have paid for themselves in less than two years.

Based on his experience, Nobre Veiga especially recommends installing a smart thermostat to regulate his home's temperature and adding insulation to an attic to help trap the heat in the house. Nobre Veiga says the smart thermostat alone helped cut his heating bills by as much as 40%.

3. Shop around for other options

You can always look at replacing your home's heating system entirely, though that can cost thousands of dollars in upfront costs. If that isn't an option, you can try shopping around for different fuel sources for your current system in order to save money.

If you have a petroleum furnace or even a wood-burning (biomass) system, Downey says that shopping around for a better deal is never a bad idea — and, much like your cable provider, heating oil suppliers are often willing to cut new customers a deal.

He recommends that you consider ditching your current supplier unless you like paying a premium. "One of the weird things about this industry," Downey says, is that "the most loyal customers are the ones who end up paying the most."

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