Energy Poverty On The Rise, Renovations and Rebates Offer Solution

Published: Wed 15 Jun 2016
A blog entry by Carlee Quintas

Contributed by:

Carlee Quintas
Marketing and Branding
Direct Energy

Carlee Quintas's Blog

“Energy poverty” may be a term you’ve never heard of before, but it’s one you should get used to. Experts tend to agree that if the average family is spending more than six percent of their household income on energy, it’s no longer considered an “affordable” expenditure. More than 10 percent is what’s considered “energy poverty” by the experts. So what do most low-income households pay?

According to Inside Energy’s Jordan Wirfs-Brock, the number of households sitting below 50 percent of the poverty level are paying a ridiculous 25 to 40 percent of their household income in about every state across the country.

If you’re quick, you’ve already thought: “well, if they’re making less than the average household but energy costs the same for both, it makes sense that a higher percentage of the lower income’s ‘whole’ would go toward energy.” While this is correct in philosophy, additional factors contributing to disparity between cost is that low-income housing tends to be energy efficient, according to an April 2016 report by the ACEEE. “We found that even though these families paid less overall on energy bills, they paid more per square foot, which indicates the relative inefficiency of their homes,” wrote the authors of the study.

The obvious answer for the average household would be an energy audit, followed by renovations that include heating and air replacement, solar panel roofing, double-paned window installation, etc. The problem is that those below 50 percent of the poverty line generally a.) don’t actually own the house that they live in, and b.) couldn’t afford renovations outright even if they did.

Still, these renovations can have a tremendous impact on energy bills. estimates that a switch to a small wind turbine-powered electric system and the installation of a solar-powered water heater can cut electric and heating bills by at least 50 percent, and by up to 90 and 80 percent respectively. On top of that, federal income tax deductions that incentivize alternative fuel consumption can help those with mortgages by between three and five dollars a month. While this doesn’t initially help the tenants, landlords renting out properties that they’re still paying mortgages on can capitalize on the tax deduction while the tenants themselves benefit from reduced energy bills.

Better investments in energy awareness and sustainable energy initiatives by the government are just one possible solution to this problem. Government assistance for clean energy users is a great start as well, but there’s still a long way to go.