Why It Is Important
Low-income households suffer a disproportionate energy burden, defined as the percentage of gross household income spent on energy costs. According to the U.S. Census (2011–2016), the national average energy burden for low-income households is 8.6%—3 times higher than for non-low-income households. Of all U.S. households, 44%, or about 50 million, are defined as low income. The opportunity for savings is high particularly where many burn traditional, expensive heating fuels or use inefficient equipment to heat and cool old, inefficient homes, leading to above-average energy expenses.
Yet, low-income communities can face barriers to accessing technologies that could help make their energy costs more affordable. Adoption by more moderate income individuals has been increasing since 2010, while low-income residents are less represented comprising about 15% of PV adoptions according to a Lawrence Berkeley National Laboratory report.
There are compounding factors that prevent many low-income households from accessing these technologies. This includes the lack of qualifying credit scores and the ability to pay for financing of upgrades. The fact that low-income households are disproportionately renters—not owners—of their homes further compounds the issue. This is because landlords may not be incentivized to make energy improvements, leaving those benefits out of reach for tenants.
Energy efficiency and renewable energy technologies can not only lower energy bills for low-income households but are also proven to improve indoor air quality, safety and comfort, thereby positively impacting human health. Energy retrofit projects also improve resiliency to rising energy costs, thereby increasing the ability of struggling families to stay in their home. When hiring locally, these projects also help to shore up neighborhood housing and create local jobs where they are often greatly needed.
Partnering with State and Local Governments
The U.S. Department of Energy Clean Energy for Low Income Communities Accelerator (CELICA) was a two-year partnership with over 30 local partners from the government, utility and nonprofit sectors, with support from 10 national partners. The partnership aimed to understand and address low-income residential energy challenges, and to demonstrate a wide range of locally designed energy efficiency and distributed renewable energy solutions.
CELICA partners leveraged commitments of $335 million to help 155,000 low-income households access energy efficiency and renewable energy benefits.
Federal Interagency Coordination
WIP's Strategic and Interagency Initiatives Team coordinates an Interagency Collaborative on Energy Solutions for Low-Income Communities to promote collaboration between federal agencies on energy initiatives for low- and moderate-income communities. This staff-level collaboration aims to provide a future where low- and moderate-income households and communities as a whole can afford their energy utility costs, are not burdened by health and safety issues in their homes and buildings, and benefit from abundant economic opportunities from industries that provide solutions for reducing energy waste and supplying affordable energy to low income communities that face the highest energy burden. The agencies involved include the U.S. Department of Housing and Urban Development, U.S. Environmental Protection Agency, U.S. Department of Agriculture, U.S. Department of Energy, U.S. Department of Health and Human Services, U.S. Department of Homeland Security, Federal Emergency Management Agency, U.S. Department of the Treasury, U.S. Department of Transportation, and Federal National Mortgage Association.
This group has created the Low-Income Energy Library: Federal Resources and Tools to provide a one-stop location for low-income energy resources across the federal government. Stakeholders can catalogue and customize resources in the Low-Income Energy Library by using the Program Funding Catalog. The Program Funding Catalog is meant to be utilized as a worksheet for stakeholders to help map out relevant resources for their low-income planning or program needs.