As Utility Bills Rise, Low-Income Americans Struggle for Access to Clean Energy

Cindy Camp is one of many Americans facing rising utility costs. Ms. Camp, who lives in Baltimore with three family members, said her gas and electric bills kept “going up and up” — reaching as high as $900 a month. Her family has tried to use less hot water by doing fewer loads of laundry, and she now eats more fast food to save on grocery bills.

Ms. Camp would like to save money on energy bills by transitioning to more energy-efficient appliances like a heat pump and solar panels. But she simply cannot afford it.

“It’s a struggle for me to even maintain food,” Ms. Camp said.

Power bills have been rising nationwide, and in Baltimore, electricity rates have increased almost 30 percent over the last decade, according to data from the Bureau of Labor Statistics. While clean energy systems and more efficient appliances could help low-income households mitigate some of those increases, many face barriers trying to gain access to those products.

Low-income households have been slower to adopt clean energy because they often lack sufficient savings or have low credit scores, which can impede their ability to finance projects. Some have also found it difficult to navigate federal and state programs that would make installations more affordable, and many are renters who cannot make upgrades themselves.

Energy costs have traditionally been a bigger burden for low-income households, which typically spend a far larger percentage of their gross income on utility bills than higher-earning households, according to the Energy Department. Many also live in older, less efficient homes, which can lead to more expensive utility bills. In 2020, 34 million U.S. households, or 27 percent of all households, reported difficulty paying their energy bills or kept their homes at an unsafe temperature because of energy cost concerns, according to the Energy Information Administration.

The Biden administration has deployed a suite of programs to try to increase access to clean energy and lower household utility bills. The efforts are part of a broader push to reduce carbon emissions in response to climate change, which often disproportionately affects disadvantaged communities.

That includes rebates for energy-efficient appliances and tax credits for purchases of solar panels and electric cars. In recent months, administration officials have awarded funding for energy efficiency upgrades at federally subsidized housing properties. The federal government will also offer bonus tax credits for clean energy investments in low-income areas and provide billions to increase access to residential solar.

In remarks on Wednesday about the administration’s efforts to make energy more affordable, Treasury Secretary Janet L. Yellen said the policies could help reduce energy bills for lower- and middle-income families “right away.” She said they were also bolstering domestic clean energy manufacturing, which would lower costs over time.

“This will make clean energy even more affordable for American consumers,” Ms. Yellen said at a community college in Boston.

Still, some advocates said it would be a challenge for the administration’s investments to reach low-income communities.

“To me the problems for folks in Baltimore and inner cities everywhere, they’re identical: ‘We struggle to pay our bills now,’” said Kristal Hartsfield, the chief executive of the National Alliance for Equity in Energy and Infrastructure, which connects communities and companies on issues related to changes in the energy sector. “We can’t flip the switch to clean energy tomorrow.”

Although White House officials said they were providing technical assistance to help people gain access to new programs, many who want to take advantage of federal and state programs said they often faced a major hurdle: paperwork.

Ms. Camp, 56, lives in a single-family home in a Northeast Baltimore neighborhood, where she has never seen a solar panel on a home or residents with electric vehicles. Still, she wants solar power and a heat pump — if she could navigate through the depths of the application process.

“It’s really discouraging,” said Ms. Camp, an AmeriCorps member. “The red tape is so thick.”

Patricia Johnson, 68, a retired machine operator who lives with her husband in East Baltimore, said her home’s heater was more than two decades old and in need of repair, but she could not afford to pay $10,000 to $15,000 to replace the system.

Ms. Johnson said she found it difficult to figure out which assistance programs she qualified for, so she went to a nearby community center run by GEDCO, a local nonprofit. Ms. Johnson later learned she qualified for a state program that funds energy efficiency upgrades, but it was still difficult to navigate the paperwork and she would not have applied without guidance.

Laurel Peltier, the chair of the Maryland Energy Advocates Coalition and a volunteer at GEDCO who worked with Ms. Johnson, said most of the people she assisted did not have computers or printers, which made it harder for them to apply for and learn about available programs.

“Government agencies have a lot of work to do in distributing programs to low-income people effectively,” Ms. Peltier said.

The nation’s largest municipal utility, the Los Angeles Department of Water and Power; the National Renewable Energy Laboratory; and the University of California, Los Angeles, recently released the first comprehensive study of some of the impacts of the energy transition on low-wealth consumers. The study highlighted growing disparities in Los Angeles between those who can afford clean energy upgrades and those who cannot.

Part of the reality, as Los Angeles recognized in its study and as some energy experts have argued, is that there is a need to educate the public about energy issues as well as how to move to clean energy technologies and find the available incentives.

Experts at the National Renewable Energy Laboratory say the energy transition will require broad participation from utilities and power providers as well as low-income and wealthier Americans. That means more will need to be done to include those who can least afford it.

While many of the new rebates are generous, they still might not cover the full price tag of clean energy products, said Diana Hernandez, an associate professor of sociomedical sciences and a co-director of the Energy Opportunity Lab at the Columbia Center on Global Energy Policy. The cost of heat pumps, which can heat and cool homes more efficiently than typical furnaces and air-conditioners, varies but an average installation costs $16,000. The new rebates, which are not yet available, would only shave up to $8,000 off those systems.

Tax credits can cover 30 percent of the cost of installing solar panels. But many people with low incomes do not owe enough in taxes to take full advantage of them, and the average cost of a residential solar system is roughly $25,000, according to the Solar Energy Industries Association.

Low-income households are less likely to make those upgrades if they are already struggling to afford necessary expenses, and many are also renters who will find it harder to benefit from the new programs because landlords might not be incentivized to make efficiency upgrades, Ms. Hernandez said.

She noted, however, that people could subscribe to a portion of energy generated by “community solar” projects, which are off-site solar systems, or lease panels.

After conducting its study, Los Angeles increased its rebates for used electric vehicles to as much as $4,000 from a maximum of $2,500 for qualified consumers. And the city said it would build and operate its own fast-charging network in low-income communities.

Without such efforts, experts say the energy transition will only work against those who can least afford to participate in it.

“This energy transition, we’re still in the process of trying to figure it out,” said Stephanie Pincetl, a professor at the U.C.L.A. Institute of the Environment and Sustainability and the director of the university’s California Center for Sustainable Communities who participated in the Los Angeles study. “We have to do this right or it’s just going to aggravate inequality.”