6 Tips to Deal With the Rising Cost of Energy

Last week, President Obama caught flack – from his own party – for proposing to slash a $5.1 billion program that offers heating subsidies for the poor.

During one of the chilliest winters on record, Obama proposed cutting the program nearly in half, MSNBC reported. Perhaps not coincidentally, a new study came out that shows, over the past decade, energy costs have consumed a bigger chunk of Americans’ budgets.

Published by the American Coalition for Clean Coal Electricity, and based on Department of Energy and Census Bureau data, the study’s [PDF] most damning stats were…

Half of U.S. households make less than $50,000 a year, and back in 2001, they spent an average of 12 percent of their after-tax income on “residential and transportation energy” – basically, heating and cooling their houses and filling up their cars. In 2005, those energy costs rose to 16 percent. In 2011, they’re projected at 20 percent.

To make matters worse, some tax incentives for making energy-saving improvements have now expired. That translates into fewer Americans making these types of improvements in the future, says advertising and research firm Shelton Group.

“Beginning this year, tax incentives that once rewarded Americans for energy-efficient improvements have been slashed,” the firm concluded after conducting a national poll [PDF]. “For many Americans, the survey found those incentives were a prime reason for making improvements, such as replacing windows, adding insulation and buying energy-efficient appliances. A full 25 percent of respondents said they wouldn’t have acted without the incentive, and another 7 percent said the incentive encouraged them to pay slightly more for a higher-efficiency model.

But you don’t need the government to lower your energy costs – although as you’ll see, it does offer some great advice. So here are the Money Talks News top tips for cutting costs when heating up the house this winter…

1. Use free online tools

Here’s a web-based tool from the U.S. Department of Energy that can help you save energy. You input your house’s specifics, it returns ways you might save. Microsoft Hohm is another site that can help you map out an energy-saving strategy (see Saving Green: New Help to Save on Power).

2. Plant trees instead of burning them

This tip may not help much this winter, since no one wants to garden in February, but at least you can plan ahead for next winter – and this summer. As you probably already know, trees save you money in the summer as they shade your house from the sun – the U.S. Forest Service estimates that three 25-foot-tall trees can slash summer air-conditioning costs for some homes by up to 25 percent. But those trees also provide a wind break in winter that can cut heating costs by that same amount. (Use this Tree Benefits Estimator to get a more precise figure.)

Cost: As much as $200 per tree planted for you, and as little as nothing if you plant them yourself and your city has a tree program: many do. Call your city hall and find out.

3. Go high-tech with your thermostat

Spending a few hundred dollars on a “remote programmable thermostat” can pay for itself in one chilly winter. They vary in price and features, but they all allow you to save money by automatically changing the temperature settings at night and when you’re out of the house. Some, like the CEM24, let your adjust the temperature using your phone. Others, like the Honeywell Prestige 7-Day Programmable, even have iPhone or iPad apps. And many let you use the Internet to go online and, say, lower the heat to 60 degrees while you’re at work and then raise it back to 70 when you’re heading home.

Cost: $200 for the low-end up to $350 for the full-color displays with all the bells and whistles. Installing a thermostat isn’t rocket science, but if you’re not handy you may also have to pay for installation by a professional.

4. Focus on your windows

It’s good advice to replace drafty windows with high-efficiency Energy Star windows, but that’s expensive – often hundreds per window. If your budget won’t allow that, explore less expensive options. One example: Interior storm windows can be cheap, and save nearly as much on your heating bill – up to 25 percent or more.

Cost: As little as $7 for this low-tech, do-it-yourself White Plastic Interior Storm Window Kit to $150 for the spring-loaded Boomerang Energy Products Energy Panel.

5. Find leaks and plug them

Is the heat leaking out of your house? If you can get it scheduled, some utility companies will conduct a free, thorough test. You can also hire a pro to do it (which can cost up to $400). A high-tech middle ground is the Black & Decker Thermal Heat Detector, which can show you heat escaping as it happens, especially in vulnerable areas like outlets and lighting fixtures. Then you can seal the leaks with caulk or molding. Customer reviews of the THD have been very positive.

Cost: Around $50 from your local hardware store.

Of course, you can also use the low-tech but time-tested method of finding leaks: Simply hold a burning candle near openings and look for a flicker that reveals incoming air.

6. Do all the little things that add up to big savings

While you’ve probably seen many of these tips, a refresher course on the basics never hurts. Here’s a good list from the U.S. Department of Energy:

• Keep the draperies and shades on your south facing windows open during the day to allow the sunlight to enter your home and closed at night to reduce the chill you may feel from cold windows.
• Set your thermostat as low as is comfortable when home. Dress for the season: Lounging around your house in shorts during the winter is expensive.
• Lower your thermostat from 72 degrees to 65 degrees when you’re not home or in bed. That alone can cut your heating bill by up to 10 percent.
• Make sure your furnace is properly maintained, and change the filter monthly.
• Check the insulation in your attic, ceilings, exterior and basement walls, floors, and crawl spaces to see if it meets the levels recommended for your area.

We’ve also done stories on saving energy year-round, both at home and in the car. For winter energy savings, see 7 Tips to Conserve Heat and Money This Winter. When spring finally arrives, check out 13 Cool Tips for Lower Energy Bills. And to save on gas for the car, check out the comprehensive list in 28 Ways to Save on Gas You Already Know – And Maybe One You Don’t.