Energy Costs Disproportionately High for Minority and Low-Income Families

Grist reported last week that a new study by the American Council for an Energy-Efficient Economy (ACEEE), found that minority households spend much more of their income on energy bills than non-Hispanic white households on average.  Blacks spend 43 percent more, Hispanics spend 20 percent more, and Native Americans spend 45 percent more.  And for low-income households, the percentage of their income spent on energy is even greater — 3 times as much of their income as other families.  For these families, particularly during the pandemic, the choices are devastating — food or electricity.   According to the study, low-income households and communities of color are especially at risk for utility shut-offs now that the moratoriums on those are expiring.

Why This Matters:  At the end of September, as utilities begin service shutoffs due to non-payment, minority and poor families will be hurt the most.  As one of the lead researchers put it, “Even before the recession, many people with high energy burdens had to cut back on other necessities.”  The authors also found that low-income households and communities of color were disproportionately burdened by utility costs in every region of the country.  One-quarter of families in the U.S. were paying a disproportionately high percentage of their income on energy, per the study.

Why Is It So High?

As Ecowatch explained, “two-thirds of low-income households are described as having a ‘high energy burden,’ spending double the national average on energy bills as a portion of their income.”  The question is why are their energy burdens so high.  The answer, or at least one of them, is that they live in older homes that are less well-insulated and are not energy efficient. The study found that if a family lived in a home built before 1980, their energy costs were more than 20% higher than those of families living in newer homes.  “We have seen in past studies that … low-income and communities of color do tend to live in older housing,” the lead researcher told Grist. One of the best way to address the inequalities, according to the study is through improving energy efficiency by upgrading “home weatherization” by improving insulation.  They found that weatherizing buildings can reduce energy burdens by up to 25 percent, as well as mprove air quality and other health outcomes for residents.  Unfortunately, as we reported earlier this year, weatherization projects and funding have been slashed due to the COVID pandemic.

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