Fast facts about energy and poverty in North Carolina
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- In 2016, 15.4 percent or 1.5 million North Carolinians were living in poverty,[ref]2016 American Community Survey Report Number: ACSBR/16-01[/ref] – equivalent to an annual income of less than $24,300 for a family of four.
- Poverty is not evenly distributed across our state: 30 counties have poverty rates above 20 percent.[ref]2016 American Community Survey Report Number: ACSBR/16-01[/ref]
- In 2016, 1.4 million households paid 6 percent or more of their income for energy.[ref]Fisher, Sheehan & Colton; Public Finance and general Economics; Belmont, MS April 2017[/ref]
- For families between 50 and 100 percent of the federal poverty level, 16 percent of their income went toward energy costs.[ref]Fisher, Sheehan & Colton; Public Finance and general Economics; Belmont, MS April 2017[/ref]
- Many renters with extremely low incomes (at or below 30 percent of area median income) spend more than half of their income on rent and utilities.[ref]National Low Income Housing Coalition. Housing Spotlight, Vol 4, Issue 1, August 2014. The Affordable Rental Housing Gap Persists.[/ref]
- This extreme energy and housing burden make families vulnerable to falling behind on rent and subsequently facing eviction and homelessness.
- Families that have the opportunity to do energy upgrades experience a multitude of benefits – including lower energy bills, lower economic stress, and improved comfort and quality of life.
Energy Efficiency and the Energy Burden
Energy efficiency (EE) can bring much needed relief to low income households, households of color, and renting households, who experience a disproportionately high energy burden. Low-income households spend, on average, 7.2% of their income on utility bills.[ref]Lifting the High Energy Burden in America’s Largest Cities, 2016[/ref] That is more than triple the 2.3% spent by higher-income households for electricity, heating, and cooling. Low income households spend more per square foot on energy than higher-income households, even though they actually use less energy overall.[ref]Building Better Efficiency Programs for Low-Income Households, 2016[/ref]
Common causes of a high home energy burden include:
- Poor insulation or air leaks
- Inefficient heating systems and appliances
- Lack of access or information to energy efficiency programs
- Lack of knowledge about energy conservation measures
- Lack of upfront capital to invest in home energy improvements
Poverty and discrimination in rental and housing markets drive low-income households and households of color into older, less efficient buildings leading to higher energy costs. High energy burdens and poor housing quality then contribute to health problems, and families struggling to pay energy bills may sacrifice nutrition, medicine and other necessities, which compound the effects of inequality. Bringing low-income housing to the efficiency level of the average U.S. home would eliminate 35% of the energy burden for low-income households.[ref]Study Highlights Energy Burden for Households and How Energy Efficiency Can Help, 2016[/ref]
Existing federal EE programs include the Weatherization Assistance Program (WAP), which funds the installation of energy efficiency measures for low-income households, and the Low Income Home Energy Assistance Program (LIHEAP), which helps households pay their energy bills. Other EE programs are utility-sponsored and include both efficiency measures and bill assistance.
However, these programs still do not reach the majority of households in need. Some reasons for this are:
- Low-income program administrators face pressure to show that programs are performing well and are cost effective, even when these programs’ success are not solely measured by energy savings.
- Lack of coordination among service providers, utilities, and government agencies and administrators of energy efficiency programs make it difficult to reach households who may benefit from these programs.
- Many low-income households face other issues that require repair before energy efficiency measures can occur, such as health, safety, moisture, durability, and/or structural repairs. In some cases, major issues can make households ineligible for these programs.
- Many low-income customers rent, and are in residences where neither the building owner nor the renter have enough incentive to invest in energy efficiency.
