The Rising Cost of Heating a Home in Winter

On October 6, 2026, the US Energy Information Administration (EIA) released its 2026–27 Winter Fuels Outlook alongside the October Short-Term Energy Outlook. What it means for you depends on your fuel: EIA expects heating oil homes to spend about 21% more than last winter and electric-heat homes about 4% more, while natural gas homes should spend about 9% less and propane homes about 3% less. These are national averages; below is how to apply them to your bill.

Key takeaways

EIA's forecast average winter spending for 2026–27 is $640 for natural gas (−9%), $1,196 for electricity (+4%), $1,246 for propane (−3%) and $2,115 for heating oil (+21%), each compared with last winter.
EIA assumes a national winter similar to last, with a warmer Northeast and a much colder West; a strong El Niño could change that.
DOE's thermostat setback saves “as much as” 10% a year on heating and cooling, a ceiling that offsets only part of the heating oil rise.
The federal 25C home improvement credit is not allowed for property placed in service after December 31, 2025, so 2026 upgrades no longer earn it.
LIHEAP, weatherization and shutoff rules are set state by state, and shutoff rules generally skip delivered fuels.

What it means for you

Natural gas homes: EIA expects lower average spending (−9%), but the West is forecast to pay more; see the regional section.
Electric-heat homes: about 4% higher bills, mostly from a 3% price rise. The worked example shows how far a setback can offset it.
Heating oil (mostly the Northeast): the largest forecast rise (+21%). See the worked example and the help section.
Propane (more common in the upper Midwest and Northeast): a forecast drop of about 3%, but delivered fuel is often outside state shutoff rules.
Renters who pay their own heat: your fuel's forecast applies as it does to an owner. Weatherization is open to renters with the landlord's permission.

What EIA forecasts for 2026–27

EIA's winter tables run November through March. Its figures describe the average household using each fuel as its main heating fuel and cover all of that fuel's uses in the home, such as water heating or cooking. They are in nominal dollars with inflation assumed at about 2%, so a rise has to exceed about 2% to beat inflation. EIA calls the numbers a broad guide for comparing this winter with last.

Main heating fuel	Forecast winter spending	Change vs. last winter	Price change	Use change
Natural gas	$640	−9%	−9%	0%
Electricity	$1,196	+4%	+3%	+1%
Propane	$1,246	−3%	−2%	−1%
Heating oil	$2,115	+21%	+34%	−9%

Source: EIA Winter Fuels Outlook 2026–27, energy expenditures table. Propane is a household-weighted average of the Northeast, Midwest and South.

Weather changes the picture by region

EIA bases its weather on the previous 30-year trend and measures cold with heating degree days, which add up how far each day's average temperature falls below 65°F. In its base case, the Northeast has 12% fewer heating degree days than last winter and the West has 25% more; the Midwest is 2% lower and the South 1% higher. For natural gas homes, that weather drives two regions: the Northeast is forecast at −14% (use −10%, price −5%), and the West at +7%, because 17% more use outweighs an 8% lower price. In the Midwest (−10%) and South (−15%), the drop comes mostly from lower prices. EIA's press release adds that the milder Northeast offsets part of the heating oil price rise.

Why the timing of price changes matters

EIA says wholesale changes in heating oil and propane prices generally reach retail prices within four to six weeks, because those markets are not rate-regulated. Natural gas and electricity prices lag because state regulators set utility rates. EIA assumes households pay the prevailing price at the time of use, so an early fill or a fixed-price contract can change your actual cost.

A worked example with EIA's changes

Illustrative example: a household spent a round $1,000 on its main heating fuel last winter, and its use and prices move exactly like EIA's national averages.

new_bill = last_winter_bill x (1 + change)
natural gas: 1,000 x (1 - 0.09) = 910
electricity: 1,000 x (1 + 0.04) = 1,040
propane:     1,000 x (1 - 0.03) = 970
heating oil: 1,000 x (1 + 0.21) = 1,210

Here last_winter_bill is your November–March spending. A $1,000 gas bill falls to $910 (a $90 saving), while a $1,000 heating oil bill rises to $1,210 (a $210 increase). The heating oil figure combines a 34% higher price with 9% lower use: 1.34 × 0.91 is about 1.22, which EIA's rounded figures show as +21%. To see what a change like this adds up to over several winters, enter last winter's bill and the forecast bill, billed yearly, in the price increase calculator.

Now add a setback at DOE's 10% ceiling, applied to each whole forecast bill as an upper bound.

Fuel	Forecast bill	Maximum setback saving (10%)	Bill at the maximum
Natural gas	$910	$91	$819
Electricity	$1,040	$104	$936
Propane	$970	$97	$873
Heating oil	$1,210	$121	$1,089

The lesson: even at DOE's ceiling, a setback offsets only a little over half of the heating oil increase ($121 of the $210 rise, about 58%). For electricity, a 10% cut in the heating part covers the $40 rise only if heating is more than about 38% of the bill ($40 ÷ $104). EIA's electricity figures include all household use except air conditioning, so the heating share can be well below the whole bill.

Thermostat setback: DOE's numbers

DOE's Home Upgrades page says you can save as much as 10% a year on heating and cooling by turning the thermostat back 7°–10°F for 8 hours a day from its normal setting. The wording is "as much as" and covers heating and cooling together, so 10% is a best case. DOE also notes that programmable thermostats have generally not been recommended for heat pump systems, though some companies now sell models designed for them.

Help with bills and shutoff rules

LIHEAP funding and how to apply

The Low Income Home Energy Assistance Program (LIHEAP) is federally funded and run by states, tribes and territories, which set eligibility, benefits and application windows. The LIHEAP Clearinghouse offers a National Energy Assistance Referral service that connects households with their local LIHEAP office.

Funding, as reported by the Clearinghouse: the final 10% of fiscal year 2026 block grant funds, about $421.5 million, went out on April 17, 2026. For fiscal year 2027, which began October 1, a first release on October 9, 2026 sent about $3.6 billion to grantees, 90% of the funds under a continuing resolution signed September 2, 2026.

State shutoff protections vary

The Clearinghouse's disconnect policy summary (last updated July 20, 2026) counts 42 states with cold-weather disconnection protections and says they generally apply to regulated utilities only. Municipal utilities, rural electric cooperatives and delivered-fuel providers are generally not regulated by state commissions, though they may choose to comply.

In Pennsylvania, under 52 Pa. Code § 56.100, from December 1 through March 31 an electric or natural gas distribution utility may not terminate service to customers with household income at or below 250% of the federal poverty level, unless the Commission authorizes it or an exception such as unauthorized use or tampering applies. A city natural gas utility may still terminate some customers between 150% and 250% of the poverty level after January 1 if they have not paid at least 50% of charges for each of the prior two months, unless an exception applies, such as a household member aged 65 or older. The Clearinghouse lists Michigan's protection as November 1 through March 31.

Weatherization and the 25C credit

DOE's Weatherization Assistance Program (WAP) improves energy efficiency in low-income homes, and DOE says a national evaluation found savings of $372 or more a year per household. Under DOE's application guidance, you apply through your state weatherization administrator. Households at or below 200% of the poverty guidelines, or receiving Supplemental Security Income, are eligible, and states may instead use the LIHEAP standard of 60% of state median income. Eligible households go on a waitlist, priority goes to groups such as older people and families with children, and renters need landlord permission.

The IRS FAQ on the One Big Beautiful Bill says the section 25C energy efficient home improvement credit will not be allowed for any property placed in service after December 31, 2025. Insulation, windows, doors and heating equipment installed in 2026 therefore do not qualify.

Frequently asked questions

Why is heating oil forecast to rise so much more than other fuels?

EIA's October 7 analysis says global distillate production, which includes heating oil, has dropped because of reduced refining activity, raising import costs and foreign demand for US exports. It expects US distillate inventories to be about 11% below the five-year average in the fourth quarter of 2026.

Does a winter shutoff protection erase what I owe?

No. The Clearinghouse says utilities keep billing during protected periods, the policies do not reduce past-due balances, and a later disconnection is possible once the restriction ends if a balance remains.

Can I still claim the 25C credit for work finished in 2025?

The IRS credit page says the credit covers improvements made through December 31, 2025, at 30% of qualified costs, with annual limits of $1,200 for most improvements and $2,000 for certain heating and water-heating equipment. It is claimed on Form 5695, and for 2025 items other than insulation and air sealing, the product must come from a qualified manufacturer, with its identification number (QMID) reported on the return.

Will switching to a fuel with a lower forecast bill save me money?

Not necessarily. EIA warns that differences between housing populations complicate comparisons across fuels, and that readers should not assume switching to a fuel with lower average spending would lower their own bill.

How is the EIA forecast likely to change during the winter?

EIA says it will update the forecast with each Short-Term Energy Outlook released during the winter; the next is due November 10, 2026. Weather is the main uncertainty; EIA also publishes cases with all regions 10% colder or 10% warmer.

Checklist before the cold sets in

Find last winter's November–March spending on your main heating fuel and apply your fuel's EIA percentage, as in the worked example.
If you use heating oil or propane, ask your dealer about payment plans and price terms now, since wholesale moves reach those prices within weeks.
Try DOE's 7°–10°F setback for 8 hours a day, unless you have a heat pump without a compatible thermostat, and treat 10% as the ceiling.
If money is tight, contact your local LIHEAP office through the Clearinghouse referral service and your state weatherization administrator, since WAP uses a waitlist.
Ask your public utility commission whether shutoff protections cover your utility.

This article is general educational information, not tax, legal or financial advice. Program rules and dates change, so confirm them with the agency named.