How Big is the U.S. "Electricity Gap"?

Income inequality in the United States has been a big conversation point recently, especially with the viral success of a video showing in striking graphical form just how badly distributed the nation's wealth really is. Now, Opower, a social engagement company that helps people reduce electricity use, decided to see if that gap extends to our homes' energy use. The answer is yes, though it doesn't approach the scope of financial inequality.

According to Opower, the top 1 percent of residential electricity users consume 4 percent of the total. Those biggest users average 33 654 kilowatt-hours per year, compared to 7 198 kWh per year for the bottom 90 percent of users. There are some fun ways of quantifying this, of course: "One day of combined residential electricity usage across the top 1 percent of US households (comprising approximately 3.1 million people) is roughly equal to one year of total electricity consumption in the African country of Sierra Leone (a nation of 5.5 million people)." The choice of comparator there could certainly be questioned, but it is striking nonetheless.

In some ways, the news here is that the gap between the biggest and smallest users is so modest. That is, we might have expected it to be much bigger. The top 1 percent of people in the U.S. rake in 17 percent of income, and possess an astonishing 35 percent of all the country's wealth. A good measure to use here is the Gini coefficient: a value of zero indicates complete equality (for $100, say, 10 people each have $10), and a value of one indicates the opposite (where one person has all $100 and the others have none). According to Opower, the Gini coefficient for income in the U.S. is 0.47, while for residential electricity use it is 0.34, a far more egalitarian distribution.

And if you drill down a bit into the electricity gap it actually seems to get smaller: the largest one percent of homes, averaging around 6400 square feet, use 2.5 times as much electricity as the average American home, at 1600 square feet (24 500 kWh/year vs. 9500 kWh/year). That means about 5.9 kWh/year per square foot for an average home, and 3.8 kWh/year per square foot for the mega homes, a more efficient rate. As the report points out, there are a few reasons for this, including the fact that some big items like a refrigerator don't scale linearly. A house five times the size of the average won't necessarily have five more fridges. People who can afford the big houses are also more likely to be able to afford energy-saving adjustments like triple-paned windows and better insulation.

The point here is that improving overall electricity use patterns in the country probably shouldn't focus on the big users (in contrast to, say, lowering the deficit by taxing higher incomes more). Of course, it's worth nothing that Opower has a vested interest in that conclusion, since they would like their particular methods for energy savings to spread as far as possible; but it does make sense.

The report does highlight some outstanding questions, including the possibility that the inequality gap is underestimated because some houses are a second home and the owners actually use more than just their primary residence's share. Still, it seems clear at least that electricity is not so unevenly used as some other resources in the U.S.

Image via Dean Terry

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