Heating Fuel Prices Getting Hotter This Winter

Temperatures are starting to get colder in Pennsylvania, and as the leaves turn color and start to drop from the trees, our winter heating season is ready to get into full swing. And of course, that means heating bills. The war in Ukraine, coupled with post-pandemic inflation, has the potential to have a double impact on heating prices this winter. So, as we slip into the season of hot cocoa and stocking caps, it may be worth your while to take another look at your heating options so that you'll be ready to keep you and your loved ones warm.  Here are a few worthwhile points to consider as you think about your heating needs.

1. Expect to pay more

Prices have risen across the board, with some sectors affected more than others. Consider the following rough estimates of the change in heating fuel prices from 2021 to 2022:

Notes: Fuel oil and Propane data from US EIA for PA price during 2nd week of October 2021 and 2022. Electricity and Natural Gas data from US EIA data for PA price of residential electricity, July 2021 and 2022 (more recent data not yet available). Wood Pellets and Cordwood data collected by the author. These prices are representative only, and can vary widely from location to location and from time to time.

All of the heating fuels have risen in price, relative to last year, but the magnitude of the increase varies widely. Propane has risen the least, which could be good news for propane users, but the heating season is only beginning. Fuel oil is often the most variable fuel price, and we see that here with a 74% increase relative to last year. Natural gas and biomass are both more moderate in their price increases, in the 12-14% range. Electricity price in the midst of a notable upswing in price, and has jumped 21% on average in Pennsylvania after many years of stable prices.

Typical cordwood costs in Pennsylvania in recent years

While the future is always uncertain, it appears that we can all expect to pay more for heat this winter, and we should budget accordingly.

2. If you can be choosy, then choose well

If you are fortunate enough to have more than one source of heat available for your home or business, you are in a great position to be able to choose the most economical fuel and thus save some money this winter. When we compare the fuels listed above, in terms of the cost per amount of heat, we see that some fuels give "more burn for the buck", so to speak:

Based on this, it appears that cordwood may be the most cost effective heating fuel this year, followed by wood pellets then natural gas. Fuel oil is the most expensive option listed. Even though propane is not showing much of a cost increase this year, it still remains one of the more expensive fuels when you consider the cost per amount of useful heat. The difference between the most and least expensive fuel is pretty dramatic - if you switch from fuel oil to cordwood, the current savings is about 67%!

While electricity is on the more expensive side, those of you who are fortunate to have a heat pump can use that heat pump to triple or even quadruple the effectiveness of that electricity at providing heat, which makes that option very cost competitive.

Keep in mind that cordwood and pellets both require some work on your part to use, which needs to be factored into your decision.

Note that the above costs are statewide averages. If you'd like to analyze the relative equivalent cost of fuels using your locally available prices, Penn State's Energy Selector (and the online version) can help you do that.

If you don't have the ability to select your heating fuel, there are still things you can do to make this winter's heating season more affordable. In fact, one of the most cost effective long-term ways to reduce your heating bill is to increase the insulation and reduce drafts by sealing up cracks around doors and windows. The cheapest way to save on heating costs is to be a bit more stingy about the temperature settings this winter - break out your favorite sweater and enjoy the crisp air indoors as well as out. And be sure to turn the thermostat down when you are not at home, and possibly turn things down at night as well. Some people find that turning down the thrermostat at night but using electric blankets to stay cosy is a good strategy that ends up saving energy and reducing costs.

If you are worried that you might not be able to afford your heating bill this year, the LI-HEAP program in Pennsylvania provides emergency assistance to low income state residents. You can contact them on their website

Best wishes for a cosy and affordable winter!