According to the Office of Energy Efficiency and Renewable Energy within the Department of Energy (DOE), as of 2018, low-income households in the United States face a significant energy burden, spending a larger share of their income on home energy costs, including electricity, natural gas and heating fuels, compared to other households.
Of all U.S. households, 44%, or about 50 million, are defined as low-income. According to DOE's Low-Income Energy Affordability Data (LEAD) Tool the national average energy burden for low-income households is 8.6%, nearly three times higher than for non-low-income households which is estimated at 3%. In some areas, depending on location and income, energy burden can be as high as 30%.
Not only do low-income households have higher energy burdens, but they also typically have less access to energy efficiency services. Efforts to address this issue involve cost-effective energy efficiency measures like improved insulation and energy-efficient lighting and appliances, which can reduce electricity consumption by 13% to 31%. These improvements not only lower energy costs but also lead to healthier indoor environments, reducing healthcare expenses. However, many factors contribute to lack of access to energy technologies, such as a lack of qualifying credit and the inability to finance upgrades. Additionally, the majority of low-income households are renters, so home energy improvements often depend on efforts by landlords.
Successfully implementing these measures in low-income communities requires careful planning and execution. This toolkit provides information on resources state lawmakers can use to help achieve energy and cost-saving for low-income households.