The High Cost of Energy in Rural America: Household Energy Burdens and Opportunities for Energy Efficiency

In this report we examine residential energy affordability in rural and small-town America. We analyze how rural household energy burdens—the percentage of household income spent on energy bills—vary across regions and among specific groups. Overall, Americans living in rural areas spend a disproportionally high share of their income on energy bills. Rural households have a median energy burden of 4.4%, compared to the national burden of 3.3%. Rural low-income households are even worse off, shouldering a median energy burden almost three times greater than the burden faced by their higher-income counterparts. Other rural residents hit particularly hard include the elderly, nonwhite, and renting households, and those living in multifamily or manufactured homes.

Our analysis reveals that rural households have higher energy costs, as a percentage of their income, than metropolitan households. Low-income, renting, nonwhite, and elderly households, as well as those occupying multifamily or manufactured homes, face even greater energy burdens than the rural median. Residential energy efficiency, an underutilized strategy in rural areas, can complement bill assistance and other social services to alleviate high household energy burdens. We recommend expanding current low-income program offerings, exploring no-risk or low-risk efficiency financing options, incorporating regional workforce development initiatives, and building relationships with other area service providers to strengthen program delivery. Energy utilities, in particular, are well positioned to work with community partners to design and deliver efficiency programs that meet the needs of their members or customers.