5 things to know about reducing heating costs

As frigid weather has engulfed Minnesota, maybe you’ve noticed your home’s drafty windows or leaky doors or that the old furnace is struggling to keep up. 

Making a home more energy efficient can make it more comfortable, cut winter heating costs and help the climate by reducing greenhouse gas emissions. It also can boost a home’s value.

Here are five things to know about making improvements to your home to save energy and cut heating costs this winter.

Act quickly to take advantage of federal tax credits before they expire.

The federal Energy Efficient Home Improvement Credit has helped many homeowners make energy-saving improvements, such as replacing doors and windows, adding insulation or installing a heat pump.

The credit helps homeowners cover up to 30 percent of the cost of certain expenses, up to $3,200 annually. More than 60,000 Minnesotans took advantage of the tax credit in 2023.

However, President Donald Trump’s tax cut and spending bill that Congress passed last summer ends the credit at the end of 2025. To qualify, new improvements must be installed and in service by Dec. 31. 

That only leaves a few weeks to wrap up those home projects before the deadline — meaning if you haven’t already started, it’s probably too late, unless your project is small in scope.

“If you don't have a contractor already lined up, it's not likely going to happen,” said Lissa Pawlisch, assistant commissioner of federal and state initiatives at the Minnesota Department of Commerce’s energy resources division.

If you miss the federal deadline, don’t fret. 

The disappearing federal tax credits aren’t a reason to shelve those home improvement plans, Pawlisch said. 

"If you want to do it, this shouldn't be a reason to not do it,” she said. “There are still lots of other opportunities up there."

Many energy utilities and some cities offer their own incentives for home efficiency projects, Pawlisch said. For example, CenterPoint Energy offers its gas customers rebates for sealing attic leaks and improving insulation.

Also, the state is getting ready to launch its own program called Save Energy Minnesota. It will combine state and federal rebate programs to help income-eligible Minnesotans make energy-saving upgrades.

An energy-efficient home saves money and helps the planet.

Homes and commercial buildings consume 40 percent of the energy used in the U.S., according to the U.S. Department of Energy. 

Of the $2,000 the average American spends paying for energy annually, the department estimates $200 to $400 could be going to waste from drafts, air leaks and outdated heating and cooling systems.

Home energy efficiency improvements have an upfront cost, but often pay for themselves over time through savings on energy bills.

"I'm going to spend less for my heating every year, and then I free up those dollars to do other things that I might want to do or that I need to do,” Pawlisch said.

And there’s an environmental benefit, too. If you’re saving energy, you’re using less natural gas, propane or other fuel source, which means fewer greenhouse gases are released that contribute to climate change.

“This is a great way for people to feel like in my own home, I am doing something that allows me to be part of that solution,” Pawlisch said.

Small changes can make a big difference. Some are free.

If you’re thinking about tackling home improvements, a good first step is a home energy audit — a diagnostic tool to identify places where a home is wasting energy.

Some improvements that can make a big difference are sealing cracks, adding insulation and installing a programmable thermostat, Pawlisch said. 

But she said homeowners also can take small steps that don’t cost anything, such as closing their fireplace’s chimney flue or placing a rolled-up towel along the base of a door.

“It seems like such a minor thing,” she said. “But part of why people feel cold in their home is because of the movement of air. It's that draft.”

If you’re struggling to pay your heating bill, help is available.

Pawlisch urges people to sign up for energy assistance. About 125,000 Minnesotans receive support every year. Some utilities also offer assistance programs.

Minnesota’s cold weather rule protects residents from having their electricity or natural gas shut off from Oct. 1 through April 30 if they sign up and maintain a payment plan. 

“Often, folks use energy assistance to help make that payment plan, because it still can be a significant chunk of money for a household who has a high energy burden,” Pawlisch said.