Blunting the US Housing Burden with Accessible Renewable Energy

Image: Pixabay

by Rachel Zhou (United States)

Nearly 34 million households in the US faced high energy burdens in 2020 (EIA). Energy burden is the percentage of household annual income used for electricity and fuel. High energy burdens lead to life-threatening health, displacement, and financial risks, and are disproportionately experienced by low-income households. Climate change, including extreme weather, heightens the urgency of this issue. Electric power is the second largest source of greenhouse gas (GHG) emissions from human activities (EPA). The Low-Income Home Energy Assistance Program (LIHEAP) provides financial assistance with energy costs, but lacks renewable energy focus. Expanding LIHEAP with community solar projects will reduce energy burdens in low-income households and cut emissions 43% by 2030 compared to 2019 levels as indicated by the UN Intergovernmental Panel on Climate Change (UNFCCC). Furthermore, replicating this community solar model globally has potential for positive widespread impact in significantly reducing fossil fuel dependence in millions of households. 

A Social and Environmental Crisis

Low-income households in the US face extremely difficult financial and health decisions due to the high cost of energy relative to their income. According to the American Council for an Energy-Efficient Economy, high energy burdens are correlated to greater risk for respiratory diseases, increased economic hardship, and difficulty in moving out of poverty (“Energy Burden”). This struggle worsens as climate change and extreme weather events disrupt energy access more frequently and intensely. Low-income communities are on the frontlines of the climate crisis, making this not only a social justice issue, but also an environmental issue. Energy is the second largest source of GHG emissions in the US (EPA). To reduce harmful emissions and mitigate climate change impacts, households must transition to renewable energy quickly. US GHG emissions must decline 43% compared to 2019 levels by 2030 to limit global warming to below 2 degrees as stated in the Paris Agreement. To achieve this goal, shared solar projects must expand to include more low-income households. This can be accomplished by expanding the Low-Income Home Energy Assistance Program (LIHEAP), to scale up accessible community solar projects. 

High Energy Burden Impacts

Access to energy is crucial to the comfort, mobility, and wellbeing of our daily lives. However, for millions of households across the US, the high cost of energy creates a significant risk of losing access to electricity. When energy-related bills cost more than 6% of a household’s income, they are considered “high” and causing financial strain. According to the US Department of Energy, low-income households face an energy burden three times higher than other households (Hoffman). Low-income families are more likely to live in energy inefficient homes and face unfavorable conditions such as outdated appliances or weak insulation. Insufficient energy accessibility support from the government has left millions struggling to afford essential energy services. 

Climate Change and Energy Access

Climate change has four key impacts on energy access: disruptions to energy supply, interruptions to electricity transmission, strain on the energy system, and increased air pollution (“Climate Change Impacts”). Access to energy is at risk of disruption due to the intensity and frequency of extreme weather like hurricanes, floods, and sea level rise. Transmission lines are prone to damage due to extreme weather, and also lose carrying capacity as temperatures rise. Further, rising temperatures will strain power grids with higher cooling demand, increasing blackout and power disruption risks. Finally, this creates a feedback loop as increasing energy production will likely increase emissions of GHGs and air pollutants that contribute to climate change.

Climate change historically has overburdened certain communities, such as low-income households. As climate change causes increased risks of disruption, low-income households face the greatest struggle reconnecting to the power grid. When energy demand increases, it raises the potential of pricing inflation, which could lead to millions of low-income homes unable to afford power. Additionally, low-income communities face barriers to accessing more affordable renewable energy. High upfront costs for rooftop solar and other alternatives limit clean energy adoption among low-income households. 

LIHEAP and Its Limitations

An existing instrument that aims to address energy affordability for low-income households is the LIHEAP, which provides households with low incomes and high energy burdens with financial assistance. While the amount varies, based on state and local regulations, between $250 and $1,800 is generally provided as a one-time energy assistance benefit (“Receive Assistance”). In 2023, an estimated 7.1 million households were served by LIHEAP (Lubhy). LIHEAP’s successes have been in providing homes with immediate financial relief with energy-related bills. However, LIHEAP has many limitations, such as programming inconsistency. While each state faces unique challenges, the lack of standardization in applications, eligibility, and types of assistance leads to potential aid recipient confusion. Additionally, the funding LIHEAP receives varies each year. For 2024, Congress allocated $4.1 billion to LIHEAP, a $2 billion decrease from the previous year. This results in 1.4 million families being cut from the program (NEADA). Finally, LIHEAP lacks the capability to transition households away from fossil fuel energies. The program cannot cover the costs of full renewable energy upgrades for low-income homes.

Community Solar Projects

According to the US Energy Information Administration, about 20% of energy-related GHG emissions come from heating, cooling, and powering households (Goldstein et al.). Reducing fossil fuel use in homes is urgently required to decrease GHG emissions by 43% by 2030 and meet the Paris Agreement goal of limiting warming to below 2 degrees. Thus, there must be a drastic push towards renewable energy in households. To assist low-income households in this shift, large scale community solar projects should be implemented nationally.

Community solar is defined as a project that enables multiple participants to own or lease shares in a solar facility and receive financial credits that lower their utility bills based on the amount of power the facility delivers to the grid (“Energy Equity”). This allows multiple households and businesses to access renewable energy without needing to install solar panels on their own property. More than 154 million people, which equates to nearly 50% of households, in the US are unable to build solar panels on their own property (“Energy Equity”). Community solar power makes renewable energy more feasible for renters, urban dwellers, low-income residents, and those with unsuitable roofs or electrical systems. Many cities across the world have acknowledged the importance of this and have implemented successful solutions. In Vienna, Austria, energy provider Wien Energie produced 50,000 MWh from citizen-owned solar plants from the years 2012 to 2019. This project involved 10,000 citizens and saved around 17,000 tons of CO2 emissions (Energy Cities). This success would be magnified if expanded to a national, or even global level. Further, there must be stronger policies for low-income communities participation. Less than half of US community solar projects included households with lower-incomes in 2018, revealing a lack of investment in low-income communities (SEPA). Supporting projects through federal programs like LIHEAP ensures the inclusion of underserved groups. 

Increasing LIHEAP Funding for Expansion

The US federal government’s Justice40 Initiative aims for 40% of the overall benefits of investments, clean energy, and affordable housing to go to disadvantaged communities. This initiative is being implemented through various federal programs and acts, including the Inflation Reduction Act (IRA), which includes a $7 billion Solar for All program that provides tax credits and incentives to solar programs. The IRA can cover large portions of community solar project costs, but low awareness and encouragement makes disadvantaged communities unlikely to reap these benefits. Only 2% of the nationwide solar capacity is dedicated to low-income communities (Lowe).

To accelerate the transition to renewable energy and attain the Justice40 goal, LIHEAP funding and scope must be increased. With more federal funding, the program can connect more low-income households with community solar projects. This funding should be reallocated from the US Department of Defense (DOD) budget. Climate change threatens national security and must be recognized by immediate increased funding towards mitigation. Divesting funds from the DOD, which was authorized $841.4 billion for 2024, towards LIHEAP will prioritize the wellbeing of vulnerable citizens. 0.5% of the DOD’s budget, which is approximately $4.2 billion for 2024, should be reallocated to LIHEAP annually. With the UN indicating a need to cut GHG emissions by 43% compared to 2019 levels by 2030, there must be immediate action.

Implementation in the US and Beyond

Following the 2024 elections, the new Administration and Congress must hit the ground running. In 2025, LIHEAP should launch pilot community solar projects in urban areas with high populations of low-income residents. In the next three years, the program should evaluate the impacts on reducing energy burdens and emissions. Based on the results, additional projects should be established with the best practices and funding adjusted. By 2030, LIHEAP will connect over 10 million households to community solar projects and lower eligibility requirements to assist more citizens.

With 2030 quickly approaching as a deadline for climate action, the US needs aggressive policy changes to reduce its GHG emissions. As a significant source of emissions, households must transition towards renewable energy now. LIHEAP expansion with reallocated funds from the national defense budget would connect burdened low-income communities to shared solar power, a solution that would provide financial relief for millions of families while simultaneously cutting emissions. Furthermore, replicating LIHEAP’s new model globally would slash emissions and provide energy justice to the world’s most vulnerable communities. Global replication would also mobilize citizens in generating renewable energy, increasing demand and investment in shared solar power. Similar initiatives could be adopted in the UN Global Loss and Damage Fund and help climate-vulnerable communities in developing countries. As climate change disproportionately harms communities that are already at risk of losing energy access, these suggestions must be implemented now.

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