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| Fig. 1: US Average Energy Burden by Income Level. [3] (Courtesy of the DOE) |
According to the U.S. Energy Information Administration, over one-third of households reported household energy insecurity in 2015. [1] These homes reported reducing food consumption or medicine to make energy bill payments. [1] Though most of America may technically have access to energy, this access does not translate into affordability.
There is a need to create greater equity in energy access by making energy more affordable for low income households. In this report, we will examine current energy affordability issues, as well as how the US can create greater energy equity in residential communities that struggle to afford energy.
Lack of affordability for low-income communities is exacerbated because low-income families tend to live in older houses, which generally lack efficient appliances. [2] In particular, the energy burden, or the amount of a household's paycheck that goes towards paying energy bills, is on average 8% for low income households, which is 3 times higher than the energy burden for other households; this is shown graphically in Fig. 1. [3]
From an intersectional perspective, we discover that there are various factors that compound the energy burden, such as housing situation and race. For example, renters, Afrian-American households, and Latino households paid more for utilities than other households. [2]
It should also be noted that rural households in particular face greater energy burdens, as well as households in colder areas (as is to be expected, given heating costs). For example, rural Alaskan households pay 60% more for energy than the US average. [3] Energy efficient solutions would significantly impact rural Alaskans household budgets and energy burden.
Energy efficiency is potential a long-term solution to alleviate high energy burdens faced by some households. [2] Through actions such as upgrading heating and AC systems, adding insulation, and installing more efficient housing appliances, over time communities can reduce the amount of energy they use, which can reduce the energy burden. [2]
However, there is the added difficulty of the cost to implement such changes. Currently, such policies are implemented on the state level; states can choose to set funding aside for low-income efficiency programs. [2] Therefore, energy efficiency solutions become a political issue, which conflicts over how to allocate taxpayer dollars.
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| Fig. 2: Alaska's RACEE Competition. [3] (Courtesy of the DOE) |
On a federal level, the United States Department of Energy created a Clean Energy for Low-Income Communities Accelerator. Launched in 2016, this program partners with state and local governments to implement cost-saving technologies in low-income communities. [3]
One potential policy-based solution on a federal level would be to increase the budget of the US Department of Energy's Weatherization Assistance Program. [2] Once again, this is a controversial program, given the constant debate in policy about how much government funding should be spent to assist the public.
States and municipalities may be able to make more headway with energy affordability programs. Some states have created initiatives to aid in energy affordability, such as Oregon's Ten Year Plan to Reduce the Energy Burden, which aims to increase household efficiency as a means to reduce the cost of energy. [4] Issued in 2017, the initiative provides approximately 2 million residents with annual energy cost relief.
Returning to the case study of rural Alaska mentioned in the previous section of the report, the US Department of Energy launched the Remote Alaskan Communities Energy Efficiency Competition in 2016, depicted graphically in Fig. 2. [3] The competition was a one-time, $4M initiative to develop affordable energy efficiency solutions. The initiative has three phases, including specific technical assistance for rural Alaskan communities based on their unique energy needs.
In this report, we have discussed current issues with energy affordability, which are compounded by various factors such as climate, location, income, and race. We then discussed current policy-based solutions to alleviate high energy burdens and create greater energy affordability.
The most pressing issue with the solutions discussed in the report is that these policy-based solutions face political barriers to implementation. Government assistance programs are controversial due to the nature of government funding and the use of taxpayer dollars towards these programs. It would be interesting to see the emergence of potential private-sector solutions to energy accessibility problems, perhaps through the use of renewable energy.
© Anita Garg. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] "Low-Income Household Energy Burden Varies Among States - Efficiency Can Help in All of Them," U.S. Office of Energy Efficiency and Renewable Energy, DOE/GO-102018-5122, December 2918.
[2] A. Drehobl and L. Ross, "Lifting the High Energy Burden in America's Largest Cities," American Council for an Energy-Efficient Economy, April 2016.
[3] "Strategy and Interagency Initiatives," U.S. Office of Energy Efficiency and Renewable Energy, DOE/EE-1650, February 2018.
[4] "How High Are Household Energy Burdens?" American Council for an Energy-Efficient Economy, September 2020.