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Electricity explained Use of electricity

Electricity consumption in the United States was about 3.8 trillion kilowatthours (kWh) in 2020

Electricity is an essential part of modern life and important to the U.S. economy. People use electricity for lighting, heating, cooling, and refrigeration and for operating appliances, computers, electronics, machinery, and public transportation systems. Total U.S. electricity consumption in 2020 was about 3.8 trillion kWh and 13 times greater than electricity use in 1950.

Total electricity consumption includes retail sales of electricity to consumers and direct use electricity. Direct use electricity is both produced by and used by the consumer. The industrial sector accounts for the majority of direct use electricity. In 2020, retail sales of electricity were about 3.66 trillion kWh, equal to 96% of total electricity consumption. Direct use of electricity by all end-use sectors was about 0.14 trillion kWh, or about 4% of total electricity consumption.

Total annual U.S. electricity consumption increased in all but 11 years between 1950 and 2020, and 8 of the years with year-over-year decreases occurred after 2007. The highest level of total annual electricity consumption occurred in 2018 at about 4 trillion kWh, when a relatively warm summer and cold winter in most regions of the country contributed to record-high residential electricity use of nearly 1.5 trillion kWh.

Total U.S. electricity consumption in 2020 was about 4% lower than in 2019, with decreases in the commercial and industrial sectors. Electricity retail sales to the industrial sector in 2020 were about 14% lower than in 2000, the peak year of U.S. retail sales to the industrial sector. The industrial sector’s share of total U.S. electricity retail sales dropped from 31% in 2000 to 25% in 2020. Residential retail sales increased about 2% in 2020.

  • The sales of electricity to major consuming sectors and percentage share of total electricity sales in 2020 were
  • residential1.46 trillion kWh38.9%
  • commercial1.28 trillion kWh34.8%
  • industrial0.92 trillion kWh25.1%
  • transportation (mostly to public transit systems)0.01 trillion kWh0.2%

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Electricity was first sold in the United States in 1879 by the California Electric Light Company in San Francisco, which produced and sold only enough electricity to power 21 electric lights (Brush arc light lamps).

Heating and cooling are the largest residential electricity uses

Heating and cooling/air conditioning account for the largest annual uses of electricity in the residential sector. Because these uses are mainly weather related, the amounts and their shares of total annual residential electricity consumption vary from year to year. The Residential Energy Consumption Survey (RECS) data for 2015 indicate that heating was the largest use of electricity in homes. The Annual Energy Outlook (AEO) provides estimates and projections for annual electricity use in the residential sector by type of end use. The pie chart below shows residential sector electricity consumption by major types of end uses in the AEO2021 Reference case for 2020.

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Click to enlarge

Computers and office equipment account for largest share of commercial sector electricity consumption

Five uses of electricity represent the largest shares of total annual electricity use in the commercial sector: computers and office equipment (combined), refrigeration, cooling, ventilation, and lighting.

Historically, electricity use for lighting usually accounted for the largest share of total annual commercial sector electricity use, but its share has declined over time mainly because of the increasing use of high efficiency lighting equipment. Conversely, the amount and share of electricity use for computers and office equipment has increased over time. Space cooling requirements are determined by weather, climate, and building design, and by heat produced by lighting equipment, computers, office equipment, miscellaneous appliances, and building occupants.

The Commercial Buildings Energy Consumption Survey (CBECS) provides detailed data on electricity use in commercial buildings in selected years. The AEO provides estimates and projections for annual electric use by the commercial sector. The pie chart on the left below shows commercial sector electricity consumption by major types of end uses in the AEO2021 Reference case for 2020.

Click to enlarge

Click to enlarge

Machine drives are the largest use of electricity by U.S. manufacturers

The industrial sector uses electricity to operate machine drives (motors), lights, computers and office equipment, and equipment for facility heating, cooling, and ventilation. Some industries, such as aluminum and steel manufacturing, use electricity for process heat, and other industries, such as food processors, use electricity for cooling, freezing, and refrigerating food. Many manufacturers, such as pulp and paper and lumber mills, generate their own electricity for direct use, mostly in combined heat and power systems, and some is sold. This reduces the amount of their electricity purchases and their net electricity consumption.

The Manufacturing Energy Consumption Survey (MECS) provides detailed data on electricity use by type of manufacturer and by major end uses in selected years. The pie chart above on the right shows the MECS 2018 data for electricity end use by major types of end uses by all manufacturers. The AEO provides estimates and projections for annual electricity purchases by the industrial sector and by type of industry/manufacturer. According to the AEO2021 Reference case, in 2020, manufacturers account for about 77% of total annual industrial sector electricity purchases, followed by mining (10%), agriculture (8%), and construction (5%).1

Electricity use in the United States is projected to grow slowly

Although near-term U.S. electricity demand may fluctuate as a result of year-to-year changes in weather, trends in long-term demand tend to be driven by economic growth offset by increases in energy efficiency. In the AEO2021 Reference case, the annual growth in total U.S. electricity demand is projected to average about 1% from 2020 through 2050.

World electricity use may grow fastest in non-OECD countries

The member countries of the Organization for Economic Cooperation and Development (OECD) accounted for about 43% of total world electricity consumption in 2018. In the International Energy Outlook 2019, non-OECD country electricity consumption is projected to grow about 1.8% per year while OECD member country electricity use is projected to grow about 0.9% per year through 2050. OECD nations' share of world electricity use is projected to be 32% in 2050.2

1 Annual Energy Outlook 2021 Reference case, Tables 6 and 24 through 34 , February 2021.

2 International Energy Outlook 2019, Reference case, Tables F.1, F.2, and F10, September 2019.

Last updated: April 7, 2021