Low Income, African American, and Renter Households Have Highest Energy Cost Burdens

A report by the American Council for an Energy-Efficient Economy titled Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities shows that low income households, renters, and African American households face greater energy cost burdens than higher income households, homeowners, and white households. The report also identifies several key strategies to reduce energy cost burdens for low income households.

The authors used American Housing Survey data to compare energy cost burdens, defined as the proportion of household income spent on energy costs, by income, tenure, and race across 48 of the largest U.S. cities. The median energy cost burden for all cities was 3.5% of a household’s income. Low income households had the highest median energy cost burden at 7.2%. African American households had energy cost burdens of 5.4%, Latino households of 4.1%, and renter households of 4.0%.

The authors were able to determine the extent to which a home’s energy inefficiency contributed to energy cost burdens for different household groups by comparing each group’s annual utility costs per square foot with that of the median household. Inefficient housing accounted for 35% of the excess energy cost burden among low income households, 42% for African American households, 68% for Latino households, and 97% for renter households. Excess energy cost burden is the difference between a specific group’s median energy cost burden and the median energy cost burden for all households.

The authors make a number of recommendations to address high energy cost burdens among low income households. They include including improving and expanding existing utility assistance and energy efficiency programs, strengthening the role of state and local governments in developing measurable goals and implementing programs for serving low income households with high energy cost burdens, and making use of existing federal regulations to create incentives for investments in programs that address high energy cost burdens.

Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities is available at: http://bit.ly/1rFFIyp