2021’s Most & Least Energy-Expensive States – WalletHub Study

The EIA forecasted total retail sales of electricity by U.S. utilities and electricity suppliers will increase by 2.8% in 2021 and by 1.0% in 2022. So far this year, estimated U.S. retail electricity sales during 1H21 were 4.5% more than for the same period of 2020. They forecast that electricity sales during 2H21 will grow by 1.2% compared with 2H20. Each day, U.S. per capita energy consumption includes 2.6 gallons of oil, 9.7 pounds of coal, and 255 cubic feet of natural gas.

With residential electricity use projected to increase by 2.8% this year, the personal-finance website WalletHub today released its report on 2021's Most & Least Energy-Expensive States.

For a better understanding of Americans’ energy costs relative to their location and consumption habits, they compared the average monthly energy bills in each of the 50 states and the District of Columbia using a special formula that accounts for the following residential energy types: electricity, natural gas, motor fuel and home heating oil.

Best vs. Worst

• Hawaii has the lowest average monthly consumption of electricity per consumer, 501 kWh, which is three times lower than in Louisiana, the highest at 1,484 kWh.
• Washington has the lowest average retail price for electricity, $0.0971 per kWh, which is 3.3 times lower than in Hawaii, the highest at $0.3206 per kWh.
• New Mexico has the lowest average residential price for natural gas, $6.40 per 1,000 cubic feet, which is 6.9 times lower than in Hawaii, the highest at $44.14 per 1,000 cubic feet.
• The District of Columbia has the lowest average monthly motor-fuel consumption per driver, 23.46 gallons, which is 3.4 times lower than in Wyoming, the highest at 80.53 gallons.
• In Northeastern states, between 8 percent and 62 percent of households use heating oil to heat their homes, compared with less than 3 percent of households in the rest of the U.S.

Expert Commentary

What are some good tips for saving money on energy bills?

“Space heating and cooling usually account for almost half of home energy use. Therefore, focusing on turning your thermostat down in the winter and up in the summer when you are not home, or sleeping is a great way to reduce your bills. Investments in attic and wall insulation can also be great ways to save money, particularly if you have an older home.”

Erica Myers – Assistant Professor, University of Illinois at Urbana-Champaign

“Think in terms of conserve, improve, invest. Conserve by using choices and behaviors to save money. This is the classic "turn off the lights" option…Improve by upgrading the performance of your energy consumption…Participate in efficiency incentives that produce longer-run savings in energy by improving lighting, insulation, and appliances. Finally, invest in playing a whole new role in the energy system by changing from a consumer to a prosumer (producer and consumer) by building your own capacities to produce and even sell energy. Rooftop solar and other distributed forms of energy generation can work with the grid, home energy storage, and electric vehicles to make you a player rather than just a price-taker in the energy system.”

Mark Alan Hughes, Ph.D. – Professor, University of Pennsylvania

What makes energy costs higher in some states than in others?

“Many factors affect the energy prices in a given state. For electricity, these factors include state and local taxes, state energy and environmental policies, market regulation and design, the generation mix across fuel types, and access to generation fuels.”

Harrison Fell – Senior Research Scholar, Columbia University

“One of the most important drivers of electricity prices is the local cost of generation. For example, prices tend to be lowest in places where a lot of inexpensive hydro is available and higher in areas that depend more on fossil fuel generation. Differences in electricity prices across regions can also be driven by local policies such as: 1) funding energy efficiency initiatives, 2) renewable generation requirements, or 3) past investments in the distribution network.”

Erica Myers – Assistant Professor, University of Illinois at Urbana-Champaign

Are tax deductions and credits effective at incentivizing households to be more energy efficient?

“Yes, but they are often insufficient. Just because energy efficiency improvements can be self-financing does not mean they are self-implementing. Confusion, complexity, and time-consuming choices can be enough to derail energy efficiency opportunities. More affluent households can feel like their time is literally too valuable to spend on saving money and less affluent households can literally not afford the time it takes to save money. Designing ways to bundle, automate (e.g., opt-out rather than opt-in), wholesale (e.g., building code requirements) energy efficiency at the systems level is much more reliable and probably necessary to get the full value to society energy efficiency.”

Mark Alan Hughes, Ph.D. – Professor, University of Pennsylvania

“The uptake of energy efficiency programs offered by many utilities is notoriously low. Improving those incentives for energy efficiency likely helps, but energy consumption, particularly in electricity and heat, often faces a saliency problem. That is, most consumers are unaware of how much they pay per unit for electricity and how much any given appliance uses, so it is very difficult for consumers to calculate potential savings from energy efficiency upgrades.”

Harrison Fell – Senior Research Scholar, Columbia University

To view the full report and your state or the District’s rank, please visit:

https://wallethub.com/edu/energy-costs-by-state/4833

Courtesy: WalletHub