As a society, we find ourselves in a situation sometimes described as a polycrisis, where social, ecological, and economic issues create challenging and mutually reinforcing synergies, making it difficult to address any problem in isolation.
For working people, the imminent need for a clean energy transition might seem like it has to take a backseat because of financial concerns at the household level. Yet, with a relatively simple financing mechanism—one that can be put in place by power utilities anywhere—the opposite can be the case. It is possible to address both affordability and climate crises at once. Programs known as inclusive utility investments (IUIs) make it feasible to accelerate the rate of the energy transition that’s already underway, while ensuring that the most cost-burdened households can benefit from that transition.
In fact, this financing mechanism is already in place in many communities, enabling cost-burdened residents to cut down on their energy bills while also facilitating a transition to healthier energy sources, and less resource use.
Energy Unaffordability
Depending on where you live and your paycheck, you may or may not regard energy bills as a regular financial stressor. For rural households in the United States, the energy burden—or the percentage of household income that goes toward energy bills—is significantly higher as a proportion of income than it is for those who live in metropolitan areas. And renters, elderly residents, or people of color, the costs associated with energy are even higher.
A 2018 report by the nonprofit research organization, The American Council for and Energy-Efficient Economy (ACEEE), found that “the median rural household energy burden is 42% greater than the median metropolitan household energy burden.”
The report also found that more vulnerable populations face significantly higher energy burdens. For example, renters in rural areas face a median energy burden 29% higher than homeowners, rural elderly households face an energy burden 44% higher than non-elderly households, and non-white rural residents have a median energy burden that is 19% higher than their white counterparts. Beyond just rural communities, a 2024 report from ACEEE found that a quarter of all low-income households in the United States spend an average of 15% of their income on energy.
Many of the households that could benefit the most from weatherization or energy upgrades like heat pumps and rooftop solar are also those who might not be able to afford it, due to lack of access to credit, loans, or savings that would pay for the upgrades.
Inclusive Utility Investments
One of the ways to benefit residents while transitioning to a cleaner and more efficient energy