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Eliminating the Path to Energy Poverty: A Multi-State Analysis of Equity in Energy Efficiency Investments


Energy poverty, or the gap in energy affordability, is a burden on low-income households amounting to millions of dollars in utility arrears. This burden negatively impacts a household’s long-term health, education, employment, and financial stability.

Energy efficiency offers an opportunity to address energy poverty through energy waste reduction measures such as LED lighting, energy-efficient HVAC systems, and insulation.

Current state policies requiring utility-managed energy efficiency programs, aimed at producing statewide reductions in energy demand, often distribute funding and program benefits disproportionately across socioeconomic groups, although a spectrum of policy measures exist that should steer policy investments and outcomes towards greater equity.

This study, evaluates the current state of equity in energy efficiency programs across state policies, and estimates the impact on the state’s home energy affordability gap if program investments were more equitable. Using a new metric called the equitable energy efficiency (E3) baseline, researchers will be able to measure the effectiveness of state policies at achieving equitable outcomes for low-income households.

The results will help guide state policy makers, regulatory agencies, utility decision makers, and energy affordability practitioners to create policies and programs that more equitably direct hundreds of millions of annual residential ratepayer-funded dollars toward the reduction of each state’s severe home energy affordability gap.

University of Michigan - Poverty Solutions
Research Areas
Energy Systems