Challenges and Solutions to Addressing the Energy Burden | Blog Series Part 2/3

The Just Solution Collective presents, “Energy Burden and the Clean Energy Transition”, a three-part blog series that addresses energy burden reduction as an important part of the clean energy transition for environmental justice and climate justice. Through this blog series, we will highlight key elements from our latest report and spotlight justice-centered policy & program solutions to address the issue while our nation considers changes to the energy sector. 

In our first blog of the series, we explored the impact of energy burden on households, health, and the environment. Part two of the blog series highlights challenges and solutions to addressing the energy burden as identified by experts in the field. In 2021, the Just Solutions Collective reached out to experts that work in low-income and BIPOC-frontline communities across the U.S. to provide an understanding of challenges and opportunities to address the energy burden. As well as identify opportunities to ensure the transition is equitable and just. A list of participating organizations and individuals can be found in the acknowledgment section of the report

Challenges to Addressing the Energy Burden

There were five key challenges to addressing the energy burden: a.) the lack of upfront costs for LMI households to transition into energy efficiency and the lack of funding for programs; b.) shortcomings of program designs that do not properly address the energy burden or LMI household’s short-term and long-term needs; c.) administrative barriers faced by people who apply for energy assistance programs; d.) barriers faced by renters when participating in energy efficiency programs; and e.) limitations of our present-day utility models creating barriers to an equitable clean energy transition. According to the interviewees, these challenges need to be addressed to ensure a transition to renewable energy will not increase the energy burden for LMI households. A few challenges are highlighted below. To read each challenge and solution, visit our website with the full report

A young woman looks at the electricity bill, Getty Images

Lack of Upfront Costs for LMI Households to Fully Transition: Most LMI households are unable to meet the upfront costs and investments needed to transition into energy efficiency, especially if lower-income households are required by policy to make any improvements to their homes. People have various pressing financial needs which make it difficult to implement energy efficiency programs, even if households are eligible. When people’s top needs like housing and food are not being met, it will be challenging to implement energy efficiency programs.

“It is not just the investments in clean energy that is necessary to consider [for the transition]. If we do it in a just and equitable way, we need to consider those costs necessary to ensure inequities are not exacerbated. The transition will cost money and raise energy expenditure levels, at least in the short-term.” – John Howat, National Consumer Law Center

Shortcomings of Program Design: Households are facing long-term economic hardship to meet energy costs. Crisis programs are very important and necessary but households need more than crisis assistance, many need programs to better support ongoing bills and energy burden reduction. This support can include arrearage management crisis assistance and reduced future payments that are affordable to the household. It is also important to target communities that are most subject to disconnection and other energy insecurity and equity factors. There is a need for policy and programs to address the root causes of energy poverty and energy insecurity and comprehensive investments in weatherization and healthy home improvements.

“Providing tax credits and grants towards some of the programs like electric vehicles and rooftop solar is not going to get you equity, people can not afford these things.” – Paula Carmody, former head at Maryland’s Office of People’s Counsel

Weatherization and Energy Efficiency Program Do Not Address Poor Housing Conditions: Many poor-quality households will not be able to access energy efficiency or weatherization because a contractor might refuse to or not be able to do work in a house that has lead, mold, asbestos or if the building is in need of structural repairs or substantial wiring. Even if a household qualifies for a free weatherization program, if lead, mold, or asbestos are found in the home, most programs do not make allowances to cover the costs of fixing those problems. 

“Buffalo has some of the oldest housing stock and some of the highest poverty rates in the country. In many poor neighborhoods and communities of color, there are toxic indoor environments with high levels of lead, mold, and asbestos or absentee property ownership. Therefore, the general conditions of people’s homes are really bad.” – Clarke Gocker, PUSH Buffalo

Participation Barriers: One of the most prominent challenges to energy assistance programs is ensuring those who are eligible participate in the program. A technical expert from Empower DataWorks identified key barriers to program participation into four categories, informational, transactional, stigma, and trust. Informational: Program managers may not know what communication channels to use to share information with eligible households; Transactional: There are transactional barriers for administrators and participants of assistance programs. There are too many stipulations that make it nearly impossible to administer assistance programs; Stigma: There is a stigma associated with people who receive benefits from the government causing people to refuse assistance even if eligible; Trust: Some customers think of utilities as a government body and may not have trust in utilities and governmental program delivery agencies, especially for undocumented people. 

Solutions to Addressing the Energy Burden

With adequate analysis and targeted programs and policies for LMI households, the energy transition is an opportunity to invest in reducing energy burdens systematically. Solutions and recommendations to address the energy burden during the transition to clean energy include increasing funding and program investments for LMI households, improving program and policy design that explicitly address the energy burden, increasing program participation, creating more efficient buildings and support for renters, and improving utility rates and targeting of programs. To read each challenge and solution, visit our website with the full report. Four ways to achieve some of these goals include: 

  1. Policies and Program Models Should Address Affordability and Upfront Investments. Programs need to address affordability in three aspects. The first is bill affordability, which should include incentives and subsidies that target and benefit BIPOC frontline communities and low-income communities, in addition to tailoring programmatic resources and dollars to those communities. The second is ensuring the transition is affordable, including incentives to transition to clean energy for LMI households. This includes easier access to the technology which is expensive compared to conventional fossil fuel. An example would be distributed technology and cost-effective distributed technology that increases the efficiency of usage in a way that lowers the cost. The third is a structure for regulatory consumer protection.
  2. Create Policies & Programs that Directly Address and Define Energy Burden. Policies and programs should be designed to eliminate high energy burdens and any cost attributable to fuel switching or any shift needed to make that transition happen. A well-designed policy should identify where costs are higher and keep them from falling onto low-income residents. Weatherization and energy efficiency programs must be comprehensively included to address the needs of low-income households. Programs should direct grants and technical assistance support to communities that will benefit from their assistance. In addition, there is a need for programs and policies to write off a utility debt. Even with a well-thought-out policy and program, there is still a need for outreach and education to make it successful so households can make their best-informed decisions. 
“There needs to be a re-examination of this kind of mix (energy assistance programs) of helping people pay their immediate bills but also give attention to future bills so that those same households aren't continually burdened” Carmen Carruthers, Citizens Utility Board of Minnesota
  1. Increase Access to Solar Programs and Ownership of Solar Programs. Community-owned energy and community solar policies are a solution to addressing household energy burden because if designed right the benefits of community solar can be universally accessible to any occupants in a building, and to renters as well as homeowners. A customer does not need to own a building or need to have a rooftop that can support a solar installation. This includes community-controlled microgrids and resilience hubs in communities that are fully community-owned and controlled. Policies should include incentives that prioritize community ownership and control, energy efficiency, and retrofits at the state level. In addition, states should provide upfront incentives during project pre-development that can help reduce early costs that community-based organizations, nonprofits, or cooperatives solar developers might face as they are looking to develop projects. A strong policy needs requirements placed on utility companies to interconnect those systems to the grid without exorbitant cost or administrative burdens placed on community-based organizations, nonprofit or cooperative solar developers. An example of a solar project is the Solar on Multifamily Affordable Housing (SOMAH) program in California. SOMAH provides financial incentives for installing photovoltaic (PV) energy systems on multifamily affordable housing in California. The program delivers clean power and credits on energy bills to hundreds of thousands of the state’s affordable housing residents. SOMAH uses a community-based approach to ensure long-term, direct financial benefits for low-income households, helps catalyze the market for solar on multifamily housing, and creates jobs. 
  1. More Collaboration with Community-Based Organizations (CBO’s), Community Action Program (CAP) Agencies, and Faith-Based Organizations. Utilities and programs should work with community-based organizations (CBO’s), Community Action Program (CAP) Agencies, and faith-based organizations to conduct outreach, communication, and help increase participation rates by assisting with applications. These collaborations need to be funded partnerships to help CBO’s have more capacity to get more people signed up for assistance, as well as work closely with households to address language barriers and the digital divide. This partnership can also be an opportunity for government agencies or nonprofits that administer energy assistance programs to create jobs and hire people in the community to do canvassing and public outreach. It was also suggested that CBO’s receive funding so they can more actively and directly distribute assistance to households.
“Engagement of community-based organizations encourages different ways to think about solutions to the energy insecurity by putting power in the hands of those experiencing higher energy burdens and building trust in a system that is responsive to community needs first.” – Mariel Thuraisingham, Front and Centered
  1. Making buildings more efficient so that they use less energy to bring down costs and address the energy burden. Building codes can be effective to enforce compliance with more energy-efficient building standards. For rental units, there is a need for enhancement of building codes, standards, and public investment in bill affordability and energy efficiency for all households of lower incomes. Using building codes to require absentee landlords to make investments in rental property will help bring it up to modern energy codes so people can live in safe quality energy-efficient housing. More advocacy and programs need to prioritize investments in people’s homes by addressing poor housing conditions and the legacies of environmental hazards and energy inefficiencies. Landlords need to invest in homes to ensure equipment is high quality. Tax incentives for improvements in rental properties can be created within Housing Authority Contracts with landlords, municipal affordability programs, or rental assistance programs to create some incentives. It is equally important to provide targeted support for building owners to make those investments in exchange for them agreeing not to raise rents or to displace tenants. Putting restrictions on their ability to raise rents and displace people from those buildings will protect renters. Programs and policies must ensure landlords do not shift the cost of clean energy systems to tenants. However, there is a need to further study what might trigger a landlord’s interest in investing. Therefore a more holistic approach is needed when think- ing about landlords’ interest in investing in their building and the benefit they get from an investment. In addition to building efficiency, tenants should have greater access to energy-efficient appliances, specifically tenants in public housing. Public housing agencies should install energy-efficient appliances in public housing buildings where lower-income households already live. This will provide direct access to renewable energy for LMI households that does not require upfront costs to households. 

House built with solid wood walls forming a breathable skeleton and allowing the house to create its own microclimate, Getty Images

To read each challenge and solution, visit our website with the full report. Stay tuned for part three of our blog series that will spotlight key players in addressing the energy burden, existing programs and policies that work well, and examples of efficient energy assistance programs in Maryland, Minnesota, and Washington.

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On March 31, 2022, Just Solutions Collective hosted a webinar sharing key findings from our “Energy Burden and the Clean Transition” report including a panel of practitioners and experts in the field. You can find the recording of the webinar here (the password is 6C5=Nd0D). Read the full report here.