Bridging the Equity Gap for Utility Energy Efficiency Programs

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The average energy burden across low-income households in the United States is 6%, three times higher than the estimated average 2% energy burden of households with higher incomes (U.S. Department of Energy 2024). One strategy for reducing energy burdens for low-income households is to increase the efficiency of energy consumption in their homes. Furthermore, when efficiency upgrades are paired with switching buildings to efficient electric appliances, even greater operational savings are possible, especially for customers reliant on delivered fuels or in areas of the country with relatively expensive gas costs.

This report analyzes the scale at which 48 of the largest utilities in the United States are investing in low-income energy efficiency programs and compares it with market-rate efficiency programs to identify the extent of the “equity gap.” We first share utility data from 2024 (the most recent year for which complete data are available) and describe utility spending and savings trends from low-income programs relative to broader energy efficiency portfolios. Following that, we highlight common barriers to scaling low-income program participation, including policy, programmatic, and practical challenges. The final section provides a menu of strategies and best practices gathered from expert interviews, case studies, and research reports to assist policymakers, utilities, and energy efficiency program implementers in expanding and enhancing programming options for low-income populations to close their equity gaps.

For each utility analyzed, we collected quantitative spending and savings data and calculated (1) overall spending per low-income household; (2) energy savings per dollar invested in low-income programming; and (3) relative investment in low-income programming compared with market-rate efficiency programming. In 2024, 28.2% of the U.S. population fell below 200% of the federal poverty level (FPL), the level we used to benchmark qualification for low-income programming. While there is a wide range of metrics and thresholds used to identify underserved households, we relied on FPL as a consistent standard across jurisdictions. Our equity gap is the difference between low-income population contributions to utility budgets (as a proportion of households served) and the level of investment in low-income programming by those utilities.

We found that in 2024, the utilities analyzed spent an average of 14.1% of their energy efficiency program budgets on low-income energy efficiency programs. While this is an increase from previous years,[1] most utilities continue to carry an equity gap and on average, this gap is 13.8%. Additionally, we found that on average, utilities spent $42 on efficiency programs per low-income customer in 2024. No direct correlation between high spending and high savings per low-income customer was found; this is likely the result of varying utility strategies around deep retrofits and expensive pre-weatherization and health and safety investments. State policy standards around investment levels in energy efficiency overall and low-income programs specifically also drove much of the variation in investment levels across utilities: In states that mandate low-income program investments or set targets for utilities, spending was much higher per low-income household—more than twice as high, on average, than in states that did not mandate low-income energy efficiency investments by utilities.

Some of the most challenging barriers include lack of supportive state policies for investing in low-income programming, lack of cost-effectiveness accounting strategies that account for more holistic benefits, complex administrative processes for enrolling new low-income residents, and communication strategies that are not well-tailored to reaching specific vulnerable communities. Moreover, while energy affordability is a key driver of participation in energy efficiency programs, if utility rates and energy assistance programs are not well aligned with energy efficiency upgrades, low-income customers may still be energy burdened after receiving efficiency upgrades.

To overcome these barriers through a combination of policy, program, and practice changes, we provide a menu of options to help scale the benefits of utility low-income energy efficiency programs (table 1). These strategies are detailed using examples and case studies pulled from the literature and expert interviews, and we highlight the strategies we consider to be higher priority actions here in bold.

Table 1. Summary of policies, programs, and practices to expand the impact of low-income energy efficiency programs

Amid both rising energy prices and rising energy demand, investment in energy efficiency in the United States is likely to only become more valuable for both consumers and the grid. Increasing energy efficiency budgets alongside increasing energy demand will allow utilities to expand their use of relatively low-cost demand side energy resources and thereby help to reduce the need for additional grid infrastructure or new generation sources (Specian and Aquino 2026).