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 (2011-2015), the national average energy burden for low-income households is 8.2%—3 times higher than for non-low-income households. 44% of U.S. households, or about 50 million, are defined as low income. The opportunity for savings is high particularly where many burn traditional, expensive heating fuels or are use inefficient equipment to 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. According to a George Washington University study, the 49 million households that earn less than $40,000 per year in 2011 accounted for less than 5% of solar installations, and few received assistance with energy efficiency improvements.
There are compounding factors that prevent many low-income households from accessing these technologies: lack qualifying credit scores and the ability to pay for financing of upgrades and the fact many are renters—not owners—of their homes. Landlords may not be incentivized to make energy improvements, leaving those benefits out of reach for tenants. Low income community institutions and businesses often lack access to capital needed to make cost-saving energy improvements.
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 Clean Energy for Low Income Communities Accelerator (CELICA) aims to lower energy bills for low-income communities through a voluntary partnership between the U.S. Department of Energy (DOE) and state and local governments. The purpose of this partnership is to better understand and address low income energy challenges, and to demonstrate a wide range of locally designed energy efficiency and distributed renewable energy solutions.
The 37 state and local governments, nonprofits, and utilities partnering in the Accelerator are leading efforts to ensure low-income communities can benefit from energy efficiency and renewable energy technologies. These partners have joined the Accelerator to create opportunities for low income communities through deployment of promising approaches, tools, and solutions to lower energy burden for low income households and communities.
- Low-income Energy Affordability Data (LEAD) Tool – Provides interactive state, county, and city level worksheets with graphs and data, including number of households at different income levels and numbers of homeowners versus renters, and breaks down fuel type, building type, construction year, average monthly energy expenditures, and energy burden.
- Baseline Assessment Guide – A series of questions to identify needs and gaps in energy efficiency, renewables, or other energy assistance programs for low-income communities.
- Strategic and Interagency Initiatives Fact Sheet – Information on the Strategic & Interagency Initiatives (SI2) team.
Federal Interagency Coordination
DOE’s Weatherization and Intergovernmental Programs Office’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.