Energy poverty in the U.S.
The Office of Energy Efficiency and Renewable Energy (EERE) finds that energy affordability can be defined in terms of consumers being able to pay for their residential electricity bills but not at the expense of covering the cost of bare necessities, such as food or medication. Such an idea implies that people should be able to take care of their energy-related expenses effortlessly without having to first prioritize among their needs.
Recent research findings, however, have highlighted a broader challenge that has got multilayered and major implications: residential households are gradually becoming more and more exposed to the rising energy costs while, simultaneously, facing the current global inflation and its economic repercussions on a micro-level. More specifically, it has been noted that, earlier this year and during a 12-month period, 22.9% of households had to endure unsafe temperatures in order to save money; by the same token, at least once during the previous 12 months, 34.0 % of them had to neglect certain basic necessities, in an attempt to take care of their energy costs.
While relating to such risky prioritizations, it has been further proven that, in 2023, there was an average increase of 6.2% in the U.S. residential electricity price compared to 2022 even though inflation outpaced the energy costs. This means that electricity bills still continued to gradually increase, and, all things considered, throughout the year, paying them proved to be quite a struggle, revealing how deeply vulnerable residential households can be. These research outcomes draw attention to a profound crisis pertaining to the issue of energy affordability, its extensions, and what is feasible to be done about it. It has been further argued that 44% of Americans, a number that translates into 50 million people, are considered to be low-income and are subjected to high energy burden, making electricity neither easily accessible nor affordable, provoking an eminent energy poverty.
France legislated the use of energy insights to tackle energy poverty
The absence of energy affordability constitutes a pressing issue, not locally confined, and its repercussions can be detected across various countries that have to deal with this efficiently while providing effective and assertive solutions. One example showcasing a response to the eminent energy poverty is that of France. Back in 2022, in an attempt to make energy more accessible and affordable to its citizens, the country enacted new legislation in order to support low-income residential households.
The decree mandated that energy retailers must offer their most vulnerable customers access to free real-time energy insights displayed in an easy-to-understand consumer app or web portal. This way, the most vulnerable consumers could understand how they consumed energy at home, identify energy guzzlers, and avoid bill shock. Such services are typically only available as premium monthly subscriptions not normally accessible to the low-income group who can benefit the most. So, France decided to ensure that this is available to those most in need.
U.S. utilities, you have got the tools to help your most vulnerable customers
Similarly, U.S. utilities can tap on the power of energy insights and provide them to the most vulnerable customers to empower them to become more energy-efficient and cut down on energy costs. This can be achieved through smart meters which are widely available across the U.S., with utilities being able to access their data. In particular, according to the U.S. Energy Information Administration, by 2022, 119 million advanced (smart) metering infrastructure (AMI) had already been installed.
Through energy insights, consumers can get access to a detailed bill breakdown, self and peer comparison, and personalized energy saving tips. This way, utilities can help them become aware of their energy consumption and reduce energy-related costs. Not only do consumers become more energy-conscious, but also, through energy disaggregation, they are equipped with the right tools to discover savings opportunities such as shifting usage to off-peak hours. Research has shown that this level of insight can lead to energy savings of up to 15%.
On the utilities’ side, this type of service not only reduces the risk of missed payments, but it also enhances customer engagement and is the key to building stronger relationships with their customers; the level of transparency that is actually achieved promotes informed decision-making and nurtures a kind of trust. Explore more on NET2GRID’s personalized customer experience here.
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