Beating the cost of heat this winter
Supply and demand appears to be the catch phrase indicating the cost of oil related products. For the last few weeks, the price of gasoline has dropped dramatically in most areas. The price of heating oil, however, is anywhere from 35 to 50 percent higher than last year, depending on geographic location according to the Energy Information Administration, an agency of the federal government.
"Demand for gasoline has diminished, and production is high, driving prices down," said Jamestowner Larry Bonier, owner of Seaway Oil. "Now that winter is around the corner, demand for heating oil is high and production is low, driving the price up. Also, China and other countries with emerging economies are demanding more product, and that can seriously affect prices," he added.
"I just wish people would stop blaming the retailers for the cost of heating oil. It's like shooting the messenger. We do not control the prices. Retailers make the same amount of money per gallon whether the price to the consumer is $1.50 per gallon or $2.50 per gallon. Actually, our percentage of profit goes down as prices go up," he said.
Bonier also said that many consumers are not doing the "common sense" things to heat their homes efficiently. He listed inadequate insulation, not keeping homes at moderate temperatures, and heating spaces that are not being used as common causes of high heating bills. "Breaking the heating system up into zones, so that rooms not being used can be shut off from the heat can save a tremendous amount of money over the course of a winter," he said. "Also, using a secondary source of heat, like a fireplace or wood burning stove can save dollars."
The EIA also said that the price of heating oil can change with the weather, and it is likely to do so. A moderate winter will reduce consumption, which will drive prices down due to high inventories, while a severe winter or even a long cold snap can have the opposite effect.
Jamestown resident Bill Bucklin said that modern technology offers many ways to heat homes economically. He heats his 2,600-square-foot home for under a $1,000 a year with a small, clean-burning propane furnace that uses less than three tanks of fuel per season.
"I have solar panels and a windmill that provide all the electricity I need. My electric bill is $5 per month because the power company charges $2.50 per meter and I have two meters," Bucklin said. "Sometimes they owe me money that is reflected in my bill because I produce more electricity than I use. The electricity I produce but don't use goes into the system for use by other consumers," he added.
"Hot water solar panels that run water through flexible tubing for radiant heat is another way to save a tremendous amount of money. However, I think energy efficiency begins with insulation. The higher the R rating in the walls and roof, the less heat needs to be generated," he said. Prefabricated 7.25-inch-thick Styrofoam walls provide an insulation rating of R30. I used 1inch-thick roof panels and Styrofoam and insulated my roof to a rating of R50," he said.
In addition, the federal government offers tax breaks through the Department of Energy and the Energy Policy Act of 2005 for installing energy-efficient materials, appliances, and products in homes and businesses. For instance, a direct tax deduction of up to $500 or 10 percent of the cost of an energy-efficient exterior garage door is available through this program. Any purchases that are applicable to this program must be made during the years 2006 and 2007. Receipts indicating date of purchase or installation are required to be eligible for the deduction. Information regarding the Energy Policy Act of 2005 can be found on the DOE Web site at www.doe.gov/taxbreaks.htm.
State plans are also available that offer tax incentives and lowinterest financing for building or converting houses and businesses that use energy-efficient products, appliances, and systems. State incentive plans for energy efficiency vary from state to state.