How to pare down home energy bills

With winter's first cold snap on the way, homeowners from Salem, Mass., to Salem, Ore., are searching for ways to keep their houses warm this winter without paying a fortune on energy.

In New England and the Midwest, forecasters predict oil and gas heating bills will be anywhere from 15 to 70 percent higher than last winter. Even cordwood and wood-pellet fuel prices are climbing because of rising transportation costs and an increased demand for wood stoves.

"We're fielding scores of calls from consumers who are very concerned about the rising costs," says Michael Ferrante, president of the Massachusetts Oil Heat Council. "Right now we're telling consumers to expect to pay 15 to 20 percent over last year's bill. But as everybody knows, energy prices are almost impossible to predict."

So what would a 50 percent jump in heating-fuel cost mean for the bottom line? Over five chilly months from November through March, a family that paid $1,000 for heat last winter will now face bills totaling $1,500.

While no single strategy can cut energy bills in half, combining a number of options can help improve your home's efficiency. And it doesn't have to cost a fortune up front; some solutions are as cheap as a $5 tube of caulk. For example:

• Replace air filters. These generally cost less than $15 and will make your furnace considerably more efficient. Experts also recommend getting your heating system serviced at the beginning of the winter.

• Apply insulating foam, weather stripping, or caulk to seal spaces around doors and windows or any other cracks where heat can escape. Areas around air and electrical ducts and pipe entrances are also prime suspects for heat loss. A leaky home is the equivalent of having a three-foot-square window open, experts say. But beware: If you seal your home too tight and refuse to open a window once in a while, your home's air quality could suffer.

• Insulate with high-grade insulation, especially in the attic and upper floors of older homes. This step will help your house retain heat and reduce heating bills by as much as 30 percent. Though the materials are cheap, the job can get pricey if you hire someone to install it.

• Use a programmable thermostat to ensure that the heat is turned down when you are sleeping or at the office. These devices, some of which can be adjusted via the Internet, cost between $40 and $100, and can ensure that you'll never walk into a cold house.

• Switch to compact fluorescent light bulbs. General Electric claims that their compact fluorescents use 70 to 75 percent less energy than normal incandescent bulbs. The cost savings over a 750 hour lifespan of a 100-watt bulb would be nearly $60 per bulb using today's electricity rates. Multiply that $60 times the number of bulbs in your home and savings start to accumulate. Want the resource implications? National Geographic reports that replacing one incandescent bulb with a compact fluorescent lamp saves the equivalent of 500 pounds of coal. If you're concerned that fluorescent bulbs flicker and have an ugly glow, you're living in the past, experts say. With many of today's models, the bulbs turn on immediately and have softer tones, even if they don't look exactly like incandescents.

Some strategies won't cost you a cent, but will require a little effort. Picking up the phone and calling your utility company for an energy audit, for example. Many utilities will send a representative to your home at no cost and point out where to make improvements.

Another simple step: Washing your windows, especially those that face south, and opening curtains during the day can help maximize the solar heat your home collects. Replacing screens with storm windows as well as closing curtains and blinds at night will help retain heat.

Conservation experts also recommend lowering the thermostat at night and anytime you'll be out for more than four hours. Turning the heat down from 72 to 65 degrees for at least eight hours a day can cut heating bills by 10 percent, according to the US Department of Energy. Marginally reducing the temperature control on a hot-water heater will also have an impact over a number of months.

For those willing to spend more money, A number of high-tech products can make a dent in home energy costs. Tankless water heaters, ranging in price from $500 to $1,100, generate big energy savings by working on demand rather than keeping water warm 24 hours per day. An outdoor thermometer, which connects to the boiler indoors, costs about $100 and will help reduce energy use on relatively warm winter days.

Shopping for new appliances? Look for refrigerators, dishwashers - even TVs and computers - with the government's Energy Star label. These appliances typically cost a bit more than other models, but can save money in the long run.

Homeowners considering a new energy-efficient heating system should wait a few months, says Bernie Kent, a personal finance partner with PricewaterhouseCoopers in New York. In January, the Energy Tax Incentive Act goes into effect. The law creates a series of tax credits to encourage people to be energy conscious. For example, a maximum annual credit of $500 can be applied after purchases of big-ticket items such as energy-efficient water heaters or new boilers.

The act also contains solar-energy incentives, offering separate tax credits of up to $2,000 each, which can be applied to the installation of solar water heaters and panels, which can cost close to $5,000 uninstalled.

As an alternative, homeowners can be credited for 10 percent of what they spend on "residential energy property expenditures" such as new insulation, windows, or doors. While the new tax incentives do not cover all the Energy Star appliances, a still-unfunded provision offers matching funds to states that provide rebates for all Energy Star products.

Despite the existence of so many options, most families don't think ahead about how to reduce energy use. Only 28 percent of Americans said that they "plan to install measures to conserve energy at home before this winter," according to a survey taken last month by the National Oilheat Research Alliance.

Such attitudes may change soon. "With rising gasoline prices, we're finally seeing demand beginning to fall substantially," says Kateri Callahan, president of the Alliance to Save Energy in Washington, D.C. "People are changing their behavior and starting to conserve."

That pattern, she says, will eventually take hold in the home.

Some homeowners may base their energy-use habits on false assumptions. To set the record straight, Portland General Electric, Oregon's largest utility company, sheds light on certain "energy myths:"

Myth: Leaving a light on uses less energy than turning it off and on several times.

Truth: Leaving an incandescent light on uses more energy than turning it on and off as needed. But a compact fluorescent light should be left on if it will be used again within 15 minutes. Switching CFLs on and off frequently shortens their lives.

Myth: Keeping your thermostat at the same temperature day and night uses less energy than turning it down at night and heating your home up again in the morning.

Truth: It takes less energy to warm up a cold home in the morning than it does to maintain a constant temperature throughout the night.

Myth: The higher you set your heater's thermostat, the faster your home will warm up.

Truth: It will take the same amount of time for the temperature to reach 70 degrees F. whether the thermostat is set at 70 or 90 degrees. Setting the thermostat all the way up increases your heating costs.

Myth: It costs less energy to boil water if you start with hot water from the tap.

Truth: It essentially uses the same amount of energy (and costs the same) whether you use hot or cold water. If you use hot water, you've already paid to heat the water in the water heater.