Economic Analysis of Home Heating and Cooling

Abstract

Over the last eleven years Houston Lighting & Power has raised utility rates an average of 17% per year. Over the last 3 1/2 years the utility rates have doubled. According to Houston City Magazine, Houstonians can expect future raises of 20-25% annually due to required construction of new utility plants to accommodate Houston's future growth. Utility costs could, and in many cases do, exceed the monthly mortgage payment. This has caused all to become concerned with what can be done to lower the utility bill for homes. In a typical Gulf Coast home approximately 50% of household utility costs are due to the air conditioning system, another 15-20% of utility costs are attributed to hot water heating. The remaining items in the home including lights, toaster, washer, dryer, etc. are relatively minor compared to these two "energy gulpers". Reducing air conditioning and hot water heating costs are therefore the two items on which homeowners should concentrate.