Energy burden is the percentage of a household’s gross income that goes toward energy costs like electricity, heating, and cooling. The U.S. Department of Energy considers any household spending 6% or more of its income on energy to have a high energy burden. While wealthier households might spend 2% or 3% of their income keeping the lights on and the house comfortable, low-income families in some parts of the country spend 10% or more, creating a financial strain that ripples into nearly every other aspect of life.
How Energy Burden Is Calculated
The formula is straightforward: divide a household’s annual energy costs by its annual gross income. If a family earns $30,000 a year and spends $3,000 on electricity and gas, their energy burden is 10%. That same $3,000 bill for a household earning $100,000 represents only a 3% burden. The dollar amount on the bill matters far less than what it represents relative to everything else a family needs to pay for.
This is what makes energy burden different from simply tracking utility prices. Energy costs can rise modestly in a region and barely register for middle-income households while pushing low-income families past the 6% threshold. Income level is the single biggest factor in determining whether energy costs become a genuine hardship.
Who Carries the Heaviest Burden
Energy burden falls unevenly across racial and income lines. Black households in the U.S. spend roughly $120 more per year on energy than other groups on average. Scaled across the population, that gap adds up to an estimated $1.6 billion in extra annual energy costs borne by Black households nationwide. Research shows this disparity persists even after accounting for income differences, pointing to structural factors like housing quality, neighborhood infrastructure, and historical patterns of residential segregation.
Low-income households broadly face the steepest burdens. Families earning below 80% of their area’s median income routinely cross the 6% threshold, and in many communities the number climbs well beyond that. Older adults on fixed incomes, people with disabilities, and households with young children are especially vulnerable. People who rely on medical devices or who have chronic conditions that limit their tolerance for temperature extremes often need more energy just to stay safe, while simultaneously earning less.
Where Energy Burden Is Highest
Geography plays a major role. The Southeast carries some of the highest energy burdens in the country. The five states where low-income households face the greatest strain are Mississippi, South Carolina, Alabama, Georgia, and Arkansas. In many Southeastern states, low-income families face energy burdens of 10% or higher.
Part of the explanation is housing stock. Older homes with poor insulation and outdated heating and cooling systems require more energy to maintain livable temperatures. Low-income households in the five hardest-hit states use 36% more electricity than the national low-income average. That higher consumption isn’t a lifestyle choice. It reflects homes that leak conditioned air through thin walls, single-pane windows, and gaps in ductwork. Hotter climates also drive up cooling costs during increasingly intense summers, and many of these same regions have lower average incomes, compounding the problem from both sides of the equation.
The Health Cost of High Energy Burden
When energy bills consume a large share of income, families make trade-offs. They skip meals, delay filling prescriptions, or let the house get dangerously hot or cold to keep costs down. These aren’t occasional sacrifices. For households with persistently high energy burdens, they become routine coping strategies that erode health over time.
Living in a home that’s too cold in winter raises the risk of respiratory illness, worsens cardiovascular conditions, and increases chronic stress. Homes that are too hot during summer expose residents to heat stress, which is particularly dangerous for pregnant women, young children, and older adults. The stress of chronic financial strain from utility bills itself contributes to anxiety, depression, and the kind of sustained cortisol elevation that wears down the body over years.
Urban neighborhoods with less tree cover and more pavement absorb and retain more heat, a phenomenon known as the urban heat island effect. Residents in these areas need more air conditioning to stay safe, but they’re often the same communities least able to afford it. People with medical conditions that already disproportionately affect Black, Indigenous, and Latino communities face a compounded risk: their health makes them more sensitive to temperature extremes while also limiting their earning potential, creating a cycle that’s difficult to escape.
How Assistance Programs Help
Two federal programs specifically target energy burden for low-income households. The Low Income Home Energy Assistance Program (LIHEAP) provides direct financial help with utility bills, keeping families connected to power during extreme weather months. The Weatherization Assistance Program (WAP) takes a longer-term approach by upgrading the home itself: adding insulation, sealing air leaks, and improving heating and cooling systems.
Weatherization produces an average of $283 in annual energy savings per household and reduces heating bills by about 30%. An evaluation by Oak Ridge National Laboratory found that every dollar invested in weatherization returns $1.72 in direct energy savings and $2.78 in additional benefits like improved health and safety. Those non-energy benefits include fewer emergency room visits for cold-related illness, reduced exposure to indoor air pollutants, and lower risk of house fires from makeshift heating.
The two programs work best in combination. LIHEAP addresses the immediate crisis of an unaffordable bill, while weatherization reduces the underlying energy waste that made the bill so high in the first place. Still, funding for both programs reaches only a fraction of eligible households in any given year, leaving millions of families to manage high energy costs on their own.
Why Energy Burden Matters Beyond Utility Bills
Households with high energy burdens don’t just struggle to keep the lights on. They face a cascading set of constraints that limit housing stability, food security, and access to medical care. When a family spends 15% of its income on energy, every other budget category shrinks. Rent payments become harder to make, increasing the risk of eviction. Groceries get stretched thinner. Car repairs or school supplies get deferred.
This is why researchers and policymakers increasingly treat energy burden as a measure of economic well-being, not just an energy statistic. A household’s energy burden reveals how much financial breathing room it has, and for millions of families across the U.S., that margin is razor-thin.