Home Utilities Costs

Before Covid hit, low-income households in Alabama, Louisiana, and Mississippi spent 10% or more of their income on home energy costs.

Home energy burdens among low-income households

Average percent of income spent on home energy costs, 2014-18

Source: U.S. Department of Energy. Notes: “Energy burden” is defined as the percentage of gross household income spent on home energy costs. “Low-income household” is defined as below 80% of the Area Median Income, as defined by the U.S.Department of Housing and Urban Development.

Many Southerners with low incomes struggle to pay for home utilities. Before the pandemic, low-income households in AL, LA, and MS spent 10% or more of their income on energy costs. In November 2021, a survey of 3,500 Supplemental Nutrition Assistance Program (SNAP) recipients in AL, GA, MS, and New Orleans, LA revealed that most were struggling to pay for utilities. Respondents ranked this concern above all others including access to internet, affordable housing, employment, healthcare and child care.¹ A more recent (June 2022) survey of GA adults found that most continue to struggle to pay for utilities.²

Southerners often have higher energy consumption because they use more air conditioning in the hot summer months, and are more likely to use electric heating in the winter (which is more expensive than gas). More efficient lighting and appliances along with home insulation can cut electric consumption by up to one-third.³ The U.S. Department of Energy has long partnered with states and communities to help low-income families reduce their energy burden through the Weatherization Assistance Program (WAP). The Bipartisan Infrastructure Act greatly expands WAP — allowing states and territories to access $3.1 billion in funding to install insulation, update heating and cooling systems, and upgrade appliances to reduce utility bills for households with low incomes.³ Communities can also use ARP funds for utility assistance and weatherization programs.⁴

1. “Two years into the pandemic, Southern families’ struggle with housing weighs heavy as lawmakers begin ARP spending plans”. The Southern Economic Advancement Project. March, 2022. https://theseap.org/wp-content/uploads/2022/03/ARP-Survey-Release_March_2022.pdf 

2. “A Survey of Georgia Residents: State of the State”. The Southern Economic Advancement Project. June, 2022. https://theseap.org/wp-content/uploads/2022/07/PerryUndem_GA_6.29-Deck.pdf 

3. “Low-Income Household Energy Burden Varies Among States – Efficiency Can Help In All of Them”. U.S. Department of Energy. January, 2019. https://www.energy.gov/sites/prod/files/2019/01/f58/WIP-Energy-Burden_final.pdf 

4. “May municipalities use ARP funds to promote increased home ownership among low-income residents or increase energy efficiency in homes?” Bloomberg Cities Network. https://bloombergcities.jhu.edu/faqs/may-municipalities-use-arp-funds-promote-increased-home-ownership-among-low-income-residents