U.S. energy insecure households were billed more for energy than other households

On average, households in the United States were billed $1.04 per square foot for energy usage across all energy sources in 2020. Those households identifying as energy insecure were billed $0.20 more per square foot than the national average and $0.26 more on average than households that did not experience energy insecurity. Household energy insecurity is the inability to adequately meet basic household energy needs and describes households who face challenges in purchasing the energy they need because of cost. For our Residential Energy Consumption Survey (RECS), energy insecurity is a measure we use to count households that have received a disconnection notice, have reduced or forgone basic necessities to pay energy bills, kept their houses at unsafe temperatures because of energy cost concerns, or been unable to repair heating or cooling equipment because of cost.

Household energy expenditures are influenced by many factors, including weather, the types of energy sources used, household behavior, and the energy-consuming space (or square footage) of the home. Energy insecure households are more likely to report their homes are drafty, poorly or not insulated, and smaller than households that did not experience energy insecurity.

Using RECS data, we can take a more detailed look at differences in energy expenditures by demographic and household characteristics. In 2020, households with income less than $10,000 a year were billed an average of $1.31 per square foot for energy, while households making $100,000 or more were billed an average of $0.96 per square foot. We can also see differences by race of the respondent, whether the home is owned or rented, level of insulation, and other characteristics. Renters with household income less than $10,000 a year were billed $1.37 per square foot, while owners in the same income range were billed at $1.21 per square foot. Across all income ranges, respondents living in rented homes were billed 28 cents more across all energy sources than respondents living in homes they owned. In general, differences greater than $0.05 per square foot are statistically significant at the 5% level, meaning that there’s a less than 5% chance that the difference is explainable by chance alone.

The 2020 RECS study collected energy-use data for 18,496 households, which is the largest sample in the program’s history. For the first time in RECS program history, these data are available at the state level for all 50 states and the District of Columbia. We recently released tables detailing total consumption, total expenditures, and energy intensities at the national, regional, and state levels.

Principal contributors: Ross Beall, Carolyn Hronis