It’s no surprise that the last several years have been fraught with significant financial challenges for American consumers. While inflation has affected many areas of the post-COVID economy, energy has been hit particularly hard, with consumers paying 14.3 percent more on average for electricity in 2022 compared to the previous year.
To assess how American households are dealing with these financial challenges, particularly around their electricity costs, the Smart Energy Consumer Collaborative (SECC) recently published its first Smart Energy Snapshot Survey, a new consumer research series designed to capture Americans’ thoughts on timely energy-related topics via brief, nationwide surveys.
Fielded to 1,524 Americans this spring, the new Snapshot Survey investigated whether Americans have struggled to pay their electric bills over the past year, if they have taken additional steps to pay and/or lower their bills, whether they are aware of or are actively participating in utility programs and services designed to help with their energy expenses and more.
According to the findings, a quarter of all Americans have struggled to pay their electric bills over the past 12 months, and this goes up to 32 percent of Americans who rent their homes and 34 percent of those making under $50K per year. Even among Americans with incomes exceeding $100K per year, about one-in-five (18 percent) still say that they have struggled to pay their electric bills.
As consumers try to stay current with these bills, they report having made a number of sacrifices in their daily lives. About half (51 percent) report having cut expenses elsewhere in their households, while about one-third have found ways to make extra money (34 percent) or have had to make late payments (32 percent). Twenty-two percent report having not paid the full amount on their bills.
Households that rent and those that make under $50K in income annually have been even harder hit. For example, 29 percent of renters have had to borrow money from friends or family to cover their electric bills. In addition, 44 percent of renters and 39 percent of those earning under $50K have had to make late payments – compared to 26 percent of homeowners and 27 percent of those earning more than $100K per year.
Given these challenges with rising electricity costs, are consumers aware of programs, services or other offers from their electricity providers that could help lower their bills?
While there is some awareness for certain programs (particularly rebates or discounts for energy-efficient appliances), consumers are generally not hearing about programs from their providers. Of consumers who report having struggled with their bills in the past year, about one-third (34 percent) have not heard of any programs, and about half of renters (48 percent) and those earning under $50K annually (49 percent) haven’t heard of any.
When we look at specific programs and offers, we find that 24 percent of consumers who have struggled have seen rebates or discounts for energy-efficient appliances, 23 percent have seen rebates or discounts for rooftop solar panels, and 23 percent have heard about energy management programs. Only 22 percent have seen offers to change their rate plan in the past year, and surprisingly, only 12 percent have heard about home energy audits.
Among renters and lower-income consumers, the numbers for all programs and offers are substantially lower – for example, just 16 percent of consumers making under $50K annually have heard of energy management programs, and only 11 percent have heard of an offer for an energy audit in the past year.
Over the past year, energy expenses have had a considerable impact on overall household finances, and many Americans have resorted to not paying the full amount of their bills, putting their bills on credit cards or borrowing money from family and friends to make ends meet. During this challenging time, electricity providers have an excellent opportunity to build relationships with these customers by connecting them with programs or other offers that can help with their bills and lower their energy burdens going forward.
For example, energy audits can help identify areas of need within the home, and many energy-efficient upgrades can easily be completed at no cost to the consumer, such as installing LED lighting or improving weather-stripping. Providers can also offer customers a personalized rate analysis, which can identify if a new rate plan can help them save money without any changes to their current behaviors. Or they can connect them with relevant assistance programs.
By using personalized offers, proactive outreach and other customer-centric strategies, electricity providers can help consumers with their bills during this time of high inflation and establish themselves as a trusted energy partner in their communities for the years to come.
To learn more about consumers’ struggles with their electricity bills over the past year, view the new “Alleviating Americans’ Energy Burdens” infographic here.