ACEEE report reveals that energy burden is higher on low-income households

The American Council for an Energy-Efficient Economy (ACEEE) issued a new report that says a quarter of low-income households spend more than 15 percent of their income on energy bills.

This revealed that low-income residents experience higher energy burdens—the share of income spent on energy—than other households.

It also found that in 23 of the 25 largest metropolitan areas, one in four low-income households have energy bills that exceeded 10 percent of income, the level at which an energy burden is considered severe. And in 17 of the 25 regions, the quarter of low-income households with the highest energy burdens pay 15 percent or more of their income on energy bills.

This forces them to face difficult choices between paying energy bills and buying other essentials, like food and medicine.

“Low-income households are more likely to reside in older and less energy-efficient homes that have inadequate insulation, drafty air leaks, and outdated heating and cooling systems. The households that are least able to afford the upfront costs of home energy upgrades are the ones that most need utility bill savings, so bringing low- or no-cost efficiency improvements to them is vital to reduce their burdens,” Roxana Ayala, lead author of the policy brief and senior local policy research analyst at ACEEE, said.

Baltimore has the highest energy burdens among the metropolitan regions ACEEE analyzed, with one in four households paying an average of 26 percent of income on energy bills. Also, the Boston, New York City, and Rochester metropolitan areas have energy burdens topping 20 percent.

The Inflation Reduction Act and the 2021 bipartisan infrastructure law both provide support for energy efficiency. Policymakers and regulators have an opportunity to leverage federal, state, local, and utility funding sources to reduce energy use in low-income households through efficiency upgrades that reduce high energy burdens.

ACEEE recommends that policymakers and regulators prioritize low-income households—both renters and homeowners—for energy efficiency investments.

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