Energy Equity

This is a complicated issue. I’ve included links to a range of additional resources in the discussion below, but my goal here is to give you a brief overview so that, as you’re making your own energy choices, you’re aware of what constraints and obstacles are shaping those choices for you and others. What you do with that knowledge is up to you, but it’s worth keeping in mind as you’re considering your climate budget and what you might do in the political sphere. After all, although this website is about what you can do individually to make your own home “climate smart,” that transformation needs to happen at scale in order to reduce greenhouse gas emissions enough to avoid the worst impacts of climate change for all of us. That means we need to consider who might not be in a good position to undertake Steps Zero through Three, and what can be done to fix that problem — on top of the fact that making sure our entire community can access and benefit from clean energy is just the right thing to do.

So: what is energy equity (also referred to as “energy justice”)? There are a range of definitions, but here’s an explanation I like from the Initiative for Energy Justice: “The goal of energy justice or energy equity is to achieve equity in both the social and economic participation in the energy system, while also remediating social, economic, and health burdens on those historically harmed by the energy system.” In other words, we don’t want to move forward with a plan to address climate change while meeting everyone’s energy needs without making sure that plan is ultimately fair to all involved.

And what do we know about whether we’re achieving that goal? A lot of research has been done on the relationship between demographic factors (like income, race, and home ownership) and societal outcomes related to energy, the environment, and public health. I’m definitely not an expert on that scientific literature, and you don’t have to become one either. Instead, I’m going to walk you through some of the highlights, using what you know by now is my favorite approach: looking at the “when” and the “how” of inequities in our energy system.

 The When

As you’ve seen in each of the steps, affordably reducing your climate footprint requires an efficient home and the right technology; carbon-free electricity; and effective energy management to get the cheapest and cleanest supply. There are certainly potential stumbling blocks on the way toward those goals, especially when:

1. Investing in climate-smart devices and home improvements;

2. Shopping for the lowest-cost carbon-free electricity from community or regional sources; and

3. Trying to use energy flexibly to match up with the supply on the grid.

 The How

How can someone with the best-laid plan still face problems getting access to available, ostensibly affordable clean energy options? Let me paint the picture for you . . . .

Affordability

Here’s a non-exhaustive list of the things you might need to pay for in going through the steps I describe here:

• Home improvement measures (energy audit, air sealing, insulation, etc.)

• Technology (appliances, smart thermostat, lighting, etc.)

• Vehicle and charging equipment

• Carbon-free electricity supply

• Contractors (HVAC, electrician)

All of these can cost hundreds or thousands of dollars — a lot for some people to afford up-front, even though many are investments that can save money in the long term. Of course it probably seems obvious that lower-income households face difficulties with a range of expenses. But federal data shows that “energy insecurity” — which basically means having trouble affording energy or even facing disconnection for unpaid utility bills — is a disproportionately big challenge for Black and Hispanic/Latino households, as well as families with children.

This isn’t just about disparities in income levels alone, either. The same data shows that the actual cost of energy per square foot of housing is higher for low-income, renter, Black, and Latino households in the U.S.:

(See here, here, here, and here for similar findings.) In other words, if you fall into certain demographic categories, you’re likely to have a more expensive home when it comes to energy costs, even compared to households at the same income level.

There are a lot of potential reasons for this disparity, such as:

• Poorer housing stock - due at least in part to historic redlining and associated geographic segregation and disinvestment;

• Lower levels of homeownership for certain groups (another impact associated with redlining for Black households), given that landlords of rental properties tending to lack the incentive to pay for measures that will lower their tenants’ energy costs;

• Greater exposure to extreme heat (cough, cough, redlining again) leading to greater air conditioning use; and

• Even lack of access to good deals on basic items like efficient LED lighting in lower-income neighborhoods.

Whatever the reason, the bottom line is that certain groups — low-income, non-white, renters, families — tend to face disproportionately high energy costs. That means less money to spend on exactly the steps needed to lower those costs and switch to cleaner energy.

Access

If you don’t have money, what can you do? You can borrow it. Theoretically, that should be a reasonable way for households to invest in at least the measures laid out here that could help them save money in the long term, like an energy audit and home insulation to reduce overall energy use, smart energy management technology to help take advantage of reduced “off-peak” rates during certain times of day, an electric vehicle with lower fuel and maintenance costs than a traditional gas-powered car, or home solar where it’s cheaper than other forms of energy. But there are two big problems with this idea.

First, many of these investments are accessible only - or at least in large part — only for property owners. If you’re in a group (non-white, low-income) that is more likely to rent a home than own it, you may be excluded from saving money through energy efficiency or low-cost clean energy from the get-go. At the very least, you’ll be dependent on a landlord who may not be particularly interested in listening to your suggestions about potential home improvements. Moreover, for multifamily housing — where about two-thirds of U.S. renter households live — sheer logistics can be an issue when it comes to installing equipment like EV chargers or home solar.

Second, if you are in a home where you do have the option to explore some of these investments, getting a loan or some other form of financing can be a big hurdle for certain demographics. There’s a significant body of evidence showing that non-white groups have disproportionately low credit scores, due to factors like the impacts of redlining, targeting for subprime mortgages, and structural problems with credit scoring criteria. Being a long-term renter rather than a homeowner can itself be a stumbling block in building good credit, since credit bureaus don’t automatically consider on-time rental or utility payments as part of your credit history, except through a paid add-on reporting service that can cost over a hundred dollars a year. Researchers have found that, in general, credit bureaus tend to rely on data sources that are less robust and less accurate for minority groups.

People who have lower credit scores due to these information disparities or who are even among the millions who are “credit invisible” will either be unable to borrow money to finance energy investments or will face higher interest rates that may make those investments unaffordable. Although there are programs being deployed to address this issue, such as “Pay As You Save” programs and “green banks” that look at utility bill payment history rather than traditional credit scores, those options are fairly limited so far — leaving many consumers excluded from financing for money-saving clean energy options.

On top of these significant barriers, there are less obvious ones that may pop up where you don’t expect them. For example, to use devices like smart thermostats to effectively manage your energy use, you generally need reliable broadband internet to set up a home Wifi network. That’s yet another area where you’ll find real disparities by race and income. Research has also shown that even households with moderate incomes may face an “energy efficiency financing coverage gap” due to needing higher credit scores than those with greater incomes in order to qualify for loans for home efficiency projects. The list could go on.

Overall, it’s clear that we’re not all on a level playing field when it comes to establishing a climate smart home. What does that mean for you? Mostly, that if you have enough discretionary income to make some (or all) of these clean energy investments, or at least access to financing on reasonable terms, you should realize that you’re actually in a better position than a lot of people. I’m not trying to make you feel guilty if you have real reasons for not moving forward with the steps described here. (Well, maybe a little bit; I am a Jewish mother, after all.) But do be aware that others may face separate constraints that you don’t, and think about what you can do — whether through charitable donations or community engagement — to make sure that we do get the critical mass of climate smart homes that we need, without leaving anyone behind.