Energy Burden and the Importance of Energy and Utility Security for Low-Income Communities

Low-income communities often get the short end of the stick, and this is no less true during a global pandemic. Energy burden, or the percentage of household income that goes toward energy costs, already disproportionately impacted low-income communities and BIPOC, but is now rising even higher. 

Pre-pandemic, the energy burden of low-income households was roughly 3x more than in other households.

Pre-pandemic, the energy burden of low-income households was roughly three times more than in other households. As incomes decline and energy use at home increases, it’s expected to rise even more. The need for energy and utility security in these communities has become clearer than ever as low-income households struggle with higher than normal energy bills. However, proactive action and energy efficiency initiatives could start to lift the burden. 

A wake-up call in the middle of a pandemic

COVID-19 has served as a wake-up call for the U.S. and its gaps in energy security. As the unemployment rate rises and bills continue to pile up, low-income households and communities of color are hit the hardest as their energy burden increases. Some cities have even called for a statewide moratorium on utilities to reduce energy burdens during the pandemic.

High energy bills are not a new issue. But energy burdens caused by the pandemic have forced families to choose between keeping their lights on and buying groceries. In addition, families have been hit with recurring late fees, the threat of service cutoffs, and record high unemployment. 

During times of chaos, everything from employment to healthcare is unstable. This is why energy and utility security is critical. Of course, utilities cannot forgo standard policies and rates, but ultimately, they will benefit from a more financially stable customer base. This is where energy efficiency comes into play. 

Reducing energy burden with energy efficiency

More than two-thirds of the multifamily rental market consists of households that have an annual income of less than $50,000. These households can benefit the most from multifamily energy efficiency programs. Reducing energy burden goes hand in hand with energy efficiency programs, as efficiency initiatives can help consumers lower their energy bills – and help utilities lower strain on the grid. 

Read more >> The Next Frontier in Energy Efficiency: “Greening” Multifamily Housing

In order to combat a high energy burden, low-income communities must be part of the conversation. Energy efficiency programs that specifically target low-income consumers are the missing piece of the puzzle. The reallocation of focus and funds to energy programs for the underserved will provide needed equity in the energy conversation. 

For every dollar Michigan utilities spend on energy efficiency programs targeted at low-income households, they spend as much as $4.34 on programs for higher-income households.

A study conducted in Michigan found that for every dollar utilities spend on energy efficiency programs targeted at low-income households, they spend as much as $4.34 on programs for higher-income households. Thus, the communities in most need of help with their energy burdens receive the least of it. The fight for clean energy must include a call to actively work towards reducing the energy burden for underserved communities.

A data-driven approach

Tackling energy burden is a complex problem that needs accurate and comprehensive data to solve it. If businesses and consumers alike have easy access to understand how and when they consume the most energy, then targeted energy efficiency initiatives will have the most impact. To learn how Urjanet helps enable better access to energy data, click here. 

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