Some Americans will get a break in home heating costs this winter, depending on what fuel they use and where they live.
Residents using natural gas to heat their homes will get the biggest break, the Energy Information Administration said in its 2023 Winter Fuels Outlook. EIA expects those households to spend about $600 on average this winter, a 21% drop from last winter.
Higher inventories are contributing to lower natural gas prices this winter. EIA expects natural gas inventories to be 6% higher than the five-year average going into the winter heating season, which started in November.
“Natural gas prices this year have been consistently lower than in 2022. Even if this winter is colder than forecast, we still expect households heated by natural gas to pay less for heat this winter,” said EIA Administrator Joe DeCarolis.
Most Americans use natural gas or electricity to heat their homes. Roughly half (46%) use natural gas, and the share of those using electricity has grown to 42% from 38% a decade ago, according to EIA. Households heating with electricity are expected to see their costs remain flat at $1,060 this year, according to the report.
EIA forecasts that natural gas will provide 42% of electric generation in 2023, compared to nearly 40% in 2022, largely because of lower prices this year, continued retirement of coal-fired plants and the addition of 5 gigawatts of high-efficiency, natural gas-fired generators coming online this year.
Renewables will continue to grow as a share of electric generation, according to EIA projections, comprising about one-quarter of production. An increase of 25 GW of new solar capacity and 8 GW in new wind capacity is driving much of that growth, the report said.
EIA forecasts that 40 GW of solar and wind generating capacity will come online in 2024, “an increase of 16% from this year, leading to the share of electricity provided by renewables rising from 22% in 2023 to 25% in 2024.”
EIA’s Winter Fuels Outlook is published each October.