Energy Burden: What It Is and How Renewables Can Help

Imagine having to choose between eating and turning on the heat on a cold December evening. Or enduring a sweltering summer day without so much as a fan, let alone air conditioning, because your paycheck doesn’t stretch far enough to cover even a few more dollars added to your electric bill.

For many low-income families, choices like these aren’t theoretical – they are an everyday occurrence. Energy bills can amount to a major financial burden, one some families struggle mightily to shoulder.

Defining what is and isn’t affordable when it comes to energy is tricky, but this much is clear: low-income families are suffering disproportionately under the current energy landscape.

Luckily, these same families could benefit enormously from many of the changes that are necessary to fighting the climate crisis.

But to get there, we have to understand the problem and its solutions.

That’s why we’re taking a look at “energy burden” and how targeted use of renewable energies like solar, as well as improved energy efficiency measures, could be game-changers for families struggling to cover their energy bills.

What is Energy Burden?

At its most straightforward, “energy burden” is the percentage of household income that goes toward energy costs (electricity, home heating, and transportation). It stands to reason that the less money you make, the greater your energy burden will be.

Higher energy burdens have real implications on the health and well-being of families and individuals. Families who have to devote higher proportions of their income to utility bills may have to make trade-offs between heating and cooling their homes or affording other necessities, such as food, medicine, and childcare.

According to the US Census (2011–2016), the national average energy burden for low-income households is 8.6 percent — three times higher than for non-low-income households. The families with the least among us are spending much larger percentages of their incomes on energy bills than families with more resources.

Of all US households, 44 percent – or about 50 million – are defined as low income.

And like with so many other things, outsized energy burden is an equity issue that disproportionately impacts minority communities.

African-American households in the US, for example, experience a median energy burden 64 percent greater than white households (5.4 percent versus 3.3 percent, respectively), and Latino households have a median burden 24 percent greater than white households (4.1 percent and 3.3 percent, respectively).

Geographically, low-income households in the Southeast and Appalachia have the highest energy burdens. Which also means that many places with lower-than-average energy prices also have the highest average energy burdens. But how?

Well, according the National Resource Defense Council, utility providers in these areas have the lowest investment in energy efficiency programs.

So, what can we do to fix this?

Solar and Energy Efficiency Are Game-changers

Energy efficiency and renewable technologies, particularly solar energy, can not only lower energy bills for low-income households, but are also proven to improve indoor air quality, safety, and comfort, bettering health outcomes.

However, there are barriers that low-income communities can face to accessing these technologies.

These could include a lack of qualifying credit scores or the ability to pay for financing of upgrades. And very importantly, low-income families are disproportionately renters—not owners—of their homes, further compounding the issue as landlords may not be incentivized to make energy improvements because they often aren’t the ones paying the actual energy bills, leaving those benefits out of reach for tenants.

For those most in need of the benefits of reduced energy burden, communities and utility providers need to work together to remove the financial barriers and embrace the already underway renewable revolution.

Luckily, some cities and states are already showing a path forward.

>> Learn more: Financing A Clean Energy Future for All <<

The District of Columbia has implemented a policy called “Solar for All,” where it aims to bring the benefits of solar energy to 100,000 low-to-moderate income families in the District of Columbia.

In Colorado, the Colorado Energy Office (CEO) recently implemented a multipronged strategy to reduce energy burden for low-income Colorado residents through the deployment of solar PV.

Besides individual home solar panels, community solar is another viable option to help lessen energy burden.

Community solar – that is “local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced” – programs can make solar energy available to renters who cannot add panels to their homes, as well as to homeowners who for any number of reasons are unable to host home PV panels. 

>> Do Panels Make Sense for My Home? <<

Demonstration community solar projects in Colorado have already shown meaningful electricity bill savings for lower-income individuals.

Besides home and community solar, improved energy efficiency is a practical solution that can also help reduce energy burden for many families. Unfortunately, low-income housing is often far less energy efficient than average construction.

Energy efficiency can take many forms, from replacing incandescent bulbs with LEDs to installing effective home insulation and windows designed to prevent heated or cooled air from escaping from a home. Efficiency measures like these and others can be relatively low-cost ways to reduce household energy costs regardless of climate, heating fuel, or energy price factors in a state.

We’ll leave it at this: If low-income housing was as energy-efficient as the average US home, customers’ energy costs would decrease by about one-third.

What You Can Do

The issues surrounding energy burden can be complicated, but this much is clear: through improved use of renewable energy and increased investment in energy efficiency, families everywhere can reduce their energy bills while taking action to help fight the worst impacts of the climate crisis. 

Are you ready to fight for solutions like these in your community? Join us for a Climate Reality Leadership Corps training this year and learn to #LeadOnClimate.

Each year, former Vice President Al Gore and Climate Reality train thousands of new leaders to communicate the urgency of the climate crisis and fight for the change we need at this crucial moment. In 2020, we’re hosting trainings in three different cities in the US:

• Raleigh, North Carolina – June 29 to July 1
• Detroit, Michigan – August 11-13
• Orlando, Florida – September 3-4

Bring your courage, commitment, and passion. Leave with the knowledge and tools to shape public opinion, inspire action your community, and lead the global fight for solutions. Apply to become a Climate Reality Leader today.