Dive Brief:

• About 25% of U.S. households face a high energy burden, meaning they put more than 6% of their income toward energy bills, according to a new report from The American Council for an Energy-Efficient Economy (ACEEE). The study analyzed data from 25 U.S. metro areas, gathered from the U.S. Census Bureau's most recent American Housing Survey in 2017.
• Low-income households experience a disproportionately higher energy burden, with 67% (25.8 million) of low-income households facing a high energy burden. 
• The energy burden is also disproportionate across racial lines. In comparison to White households, Black households spend 43% more of their income on energy costs; Hispanic households spend 20% more; and Native American households spend 45% more. 

Dive Insight:

American households spend an average of 3% of their income on energy bills. And energy insecurity — the inability to meet basic household energy needs over time — is gaining attention as a major equity issue. Examining energy burden gives an idea of energy affordability and which groups could most benefit from energy justice and energy affordability policies and investments.

The energy burden is estimated to be even worse now for the named communities due to the pandemic and recession. 

"Energy costs existed before this current moment, but the pandemic and recession are straining family budgets right now. Black communities in particular, and other communities of color, have been hardest hit by job losses and the health impact of the pandemic," said Ariel Drehobl, senior research associate at ACEEE. "Everyone needs power right now and in this unique time, a lot of people do not have jobs or means of income to meet that need."

The pandemic has disproportionately affected Black communities and communities of color in cities across the country. Black Americans are not more susceptible to the disease, but rather they are more likely to have preexisting conditions that make them more susceptible to contracting an illness. Living in neighborhoods experiencing disinvestment or under-investment leads to lack of quality healthcare, healthy food, reliable transit, walkable streets and green space.

Black and Hispanic residents are also less likely to be able to pay their rent during the pandemic. And communities of color and low-income communities suffer more from the digital divide. 

The socioeconomic factors listed in the report as affecting energy burden are intuitive, covering sudden and long-term financial hardships and/or difficulty affording energy efficiency investment. The physical factors relate not to the person, but rather to the building in which they live. Examples are housing age, housing type (e.g. single family vs. multi-family), heating and cooling system, building envelope (e.g. insulation, leaks, building sealing) and appliance and lighting efficiency.

"The physical factors are really important, especially from an energy efficiency standpoint. Low-income households who have a high burden also tend to live in older buildings with less efficient appliances and use more energy per square foot," Drehobl said.

Renters also have about a 13% higher energy burden than home owners, and can be beholden to landlords' willingness to implement energy efficiency measures. 

The main focus of the report's policy recommendations include ramping up investment in weatherization and energy efficiency programs. These strategies can significantly reduce energy burdens while also benefiting the environment. 

Policy making is an important aspect to focus on because of how acutely governmental policies affect citizens' lives. Many past policies have contributed to people of color currently experiencing less prosperity and greater energy burdens, Drehobl said.

"A lot of the communities we found with higher energy burdens — Black, Hispanic and other communities — have experienced histories of systemic policies that led to economic and social exclusion: neighborhood segregation, redlining, mass incarceration, employment discrimination, lack of schools," Drehobl said. "These groups have less efficient housing and do not have the capital to make energy efficiency upgrades. As policy makers move forward, it's important to address the inequities they see in the system."