Get ready to spend a few more bucks heating your home this winter. The average U.S. household will pay $986 during the 2010-2011 heating season, according to the Energy Information Administration. The year-over-year increase of $24 would be worse if not for the fact that heating degree-days are expected to be 3 percent warmer this winter.

Consumers who heat with oil will see the biggest hike in expenditures up an average of 11.5 percent to $1,906. That’s followed by propane (up 7.5 percent to $1,830) and natural gas (up 3.6 percent to $751). Consumers who heat with electricity will actually see their bills go down 1.9 percent on average to $959.
No matter where you fall in the EIA projections, you can reduce your energy bills this winter with the following advice from Consumer Reports: 

Set thermostats for savings
Knock up to 20 percent off your heating costs by lowering your home’s thermostat 5 degrees at night and 10 degrees during the day. If you have an old analog thermostat, consider buying a new programmable one that lets you set different schedules. Read our report on programmable thermostats and check the Database of State Incentives for Renewables & Efficiency for rebates. 

Seal air leaks
Insulating your attic and weather stripping around windows can slash annual energy costs by 30 percent. First plug large gaps around chimneys, furnace flues, plumbing pipes, ductwork, light fixtures and soffits. Then lay insulation between attic-floor joists and on the hatch or door, or replace insulation if what you have is old and worn (dirty insulation is a sign of air infiltration). Don’t forget to insulate ceilings in unheated basements and around the walls in heated basements or unvented crawl spaces. Also be sure to insulate ducts and hot-water pipes. Federal energy tax credits will help cover the costs if you complete the work before December 31.

Review billing options
Many utilities and heating-fuel suppliers tout level-billing plans that let you “lock in” fuel prices at earlier rates as a hedge against huge winter bills. In reality, level billing simply divides your estimated annual bill over the next 12 months. Keep the extra cash in your bank account, where it will earn interest. Though fuel lock-in plans can be a good deal if prices rise fast, surcharges and cancellation fees often eliminate any real savings.

Consider alternative energy
If used judiciously, a wood pellet stove can help trim your heating costs. Based on our tests, burning pellets costs roughly 15 percent less than oil and nearly 40 percent less than electricity. Read our full report for details on proper usage as well our Ratings of six models. Upgrading to a solar or hybrid water heater is another way to lower your energy bill. Federal energy tax credits apply for many models.   

Inspect heating equipment
Have a heating and cooling technician check gas- or oil-fired furnaces, boilers, water heaters and dryers to make sure they’re running efficiently and safely. And remember to install a smoke and carbon-monoxide alarm on each floor.

—Daniel DiClerico