The threshold beyond which experts believe energy ceases to be “affordable” is 6 percent of a household’s income. But for many lower-income households, even with declining energy prices, paying less than that benchmark is a fantasy. DeAndrea Newman Salvador, an economist and the founder of The Renewable Energy Transition Initiative, a nonprofit, studied the cost of home utilities in her native North Carolina and found that energy expenditures among low-earning households were staggeringly high.
“Lower-income households fall into something we and others call ‘energy poverty,’ which is typically recognized as when someone spends just under about 10 percent of their income on energy-related expenses,” she says. “Compared to a middle-to-upper-income household that may spend 5 percent or less, as low as 1 percent, what I found in North Carolina is that a lower-income family can spend greater than 20 percent.”
Citing data from the Department of Health and Human Services, Salvador added that the disparity was particularly prevalent among “people who were below 50 percent of the poverty level.” She found that many in this group “were spending roughly 35 percent of their income toward home-energy bills.”