2015’s Most & Least Energy-Expensive States

by Richie Bernardo

WH-Best-Badges-150x150-2Get ready to crank up those air conditioners. July tends to be the hottest month of the year, and the heat will likely burn a hole through your wallet. In fact, about 7.3 percent of the average consumer’s total annual income goes to energy costs. So if you’re planning to relocate this summer, perhaps to start a new job, you may want to consider the disparity in energy costs among the candidate states on your short list.

Keep in mind that lower prices don’t always equate with lower costs, as consumption is a key determinant in the total amount of an energy bill. In areas such as Southern Louisiana, with scorching summer weather but cheap electricity, households still end up with higher out-of-pocket costs than those in energy-expensive Northern California, where the temperate climate keeps heating and cooling units idle most of the year.

To help consumers budget for certain utilities, WalletHub compared the total monthly energy bills in each of the 50 states and the District of Columbia. We constructed the ranking using eight key metrics that examine the consumption rates and prices of four energy types: electricity, natural gas, motor fuel and home heating oil. Our findings, as well as expert commentary and a detailed methodology, can be found below.

Main Findings

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Overall Rank

State

Total Energy Cost

Monthly Electricity Cost
(Rank)

Monthly Natural Gas Cost
(Rank)

Monthly Motor Fuel Cost
(Rank)

Monthly Home Heating Oil Cost
(Rank)

1 District of Columbia $223 $79
(1)
$51
(41)
$84
(1)
$8.76
(37)
2 Colorado $244 $93
(5)
$44
(38)
$107
(6)
$0.10
(13)
3 Washington $245 $99
(8)
$30
(21)
$113
(13)
$2.95
(27)
4 Oregon $261 $105
(11)
$28
(17)
$126
(23)
$3.00
(29)
5 Arizona $268 $136
(36)
$19
(9)
$113
(11)
$0.01
(4)
6 New Mexico $274 $87
(3)
$35
(27)
$151
(44)
$0.03
(7)
7 Illinois $274 $87
(2)
$65
(50)
$122
(17)
$0.25
(16)
8 Florida $276 $148
(47)
$3
(1)
$124
(21)
$0.02
(6)
9 California $280 $96
(6)
$32
(22)
$153
(45)
$0.10
(12)
10 Louisiana $284 $141
(41)
$20
(11)
$123
(19)
$0.02
(5)
11 Iowa $287 $110
(17)
$44
(37)
$131
(30)
$1.40
(24)
12 Montana $287 $105
(10)
$35
(26)
$144
(39)
$2.98
(28)
13 Arkansas $287 $129
(30)
$27
(16)
$131
(31)
$0.05
(9)
14 Wisconsin $289 $109
(16)
$45
(39)
$129
(29)
$4.84
(34)
15 Tennessee $289 $137
(37)
$23
(12)
$129
(28)
$0.24
(15)
16 South Carolina $290 $162
(50)
$17
(5)
$111
(9)
$0.62
(21)
17 Idaho $291 $115
(20)
$32
(23)
$141
(38)
$3.41
(31)
18 Kentucky $294 $129
(31)
$26
(15)
$138
(36)
$0.86
(22)
19 North Carolina $294 $138
(38)
$18
(8)
$134
(33)
$3.12
(30)
20 Virginia $296 $136
(35)
$28
(18)
$122
(16)
$10.51
(39)
21 South Dakota $296 $126
(28)
$29
(19)
$136
(34)
$4.34
(33)
22 Ohio $298 $115
(19)
$52
(42)
$128
(26)
$4.02
(32)
23 Kansas $298 $119
(23)
$52
(43)
$128
(24)
$0.04
(8)
24 Nevada $301 $121
(25)
$33
(24)
$147
(41)
$0.37
(20)
25 Texas $302 $148
(46)
$20
(10)
$134
(32)
$0.001
(1)
26 Nebraska $304 $140
(39)
$40
(31)
$125
(22)
$0.36
(19)
27 Michigan $304 $108
(15)
$66
(51)
$128
(25)
$2.06
(25)
28 Hawaii $307 $179
(51)
$5
(3)
$122
(18)
$0.002
(3)
29 Minnesota $307 $107
(12)
$45
(40)
$149
(42)
$6.34
(36)
30 New Jersey $307 $118
(21)
$65
(49)
$105
(3)
$20.52
(42)
31 Utah $308 $91
(4)
$56
(45)
$161
(48)
$0.31
(18)
32 West Virginia $310 $124
(27)
$30
(20)
$151
(43)
$5.12
(35)
33 Delaware $312 $146
(45)
$34
(25)
$113
(12)
$17.95
(40)
34 Missouri $318 $140
(40)
$41
(33)
$136
(35)
$0.29
(17)
35 Pennsylvania $319 $133
(34)
$44
(36)
$105
(4)
$37.70
(43)
36 Maryland $321 $141
(42)
$38
(29)
$124
(20)
$18.51
(41)
37 New York $321 $110
(18)
$60
(47)
$112
(10)
$38.65
(44)
38 Indiana $322 $123
(26)
$41
(32)
$157
(46)
$1.20
(23)
39 Alabama $323 $160
(49)
$25
(13)
$138
(37)
$0.11
(14)
40 New Hampshire $324 $120
(24)
$16
(4)
$109
(8)
$79.64
(47)
41 Mississippi $331 $153
(48)
$17
(6)
$161
(47)
$0.002
(2)
42 Georgia $331 $145
(44)
$42
(34)
$144
(40)
$0.09
(11)
43 Oklahoma $334 $130
(32)
$37
(28)
$167
(49)
$0.07
(10)
44 Maine $341 $101
(9)
$4
(2)
$128
(27)
$107.60
(50)
45 Vermont $342 $118
(22)
$18
(7)
$119
(15)
$86.62
(48)
46 North Dakota $342 $131
(33)
$26
(14)
$176
(50)
$9.00
(38)
47 Rhode Island $346 $98
(7)
$54
(44)
$95
(2)
$99.18
(49)
48 Alaska $349 $127
(29)
$56
(46)
$105
(5)
$61.22
(45)
49 Massachusetts $352 $108
(14)
$63
(48)
$108
(7)
$73.48
(46)
50 Wyoming $355 $108
(13)
$42
(35)
$203
(51)
$2.14
(26)
51 Connecticut $410 $142
(43)
$39
(30)
$118
(14)
$110.55
(51)

Most-&-Least-Energy-Expensive-States-Artwork

Ask the Experts

According to the U.S. Energy Information Administration, the highest energy consumption of the year is recorded in July, followed by August. And energy costs are bound to rise in tandem with climbing temperatures. For insight into the various ways Americans can reduce their dependence on traditional energy sources — and thereby diminish their costs as well — we asked a panel of energy and policy experts to weigh in. Click on the experts’ profiles to read their bios and responses to the following key questions:

  1. What are some good tips for saving money on energy bills?
  2. Are tax deductions and credits effective at incentivizing households to be more energy-efficient?
  3. Do you believe the government should continue to provide energy assistance to low-income households? If so, what is the best way to do so?
  4. What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?
< >
  • Sanya Carley Associate Professor in the School of Public and Environmental Affairs at Indiana University
  • Steven C. Hackett Chair and Professor in the Department of Economics at Humboldt State University
  • David C. Popp Professor of Public Administration and International Affairs at Syracuse University, Maxwell School of Citizenship and Public Affairs
  • Barry Solomon Professor of Geography and Environmental Policy in the Department of Social Sciences at Michigan Technological University
  • Sarah Jacobson Assistant Professor of Economics at Williams College
  • Mark Jacobsen Associate Professor in the Department of Economics at University of California, San Diego
  • Dave Rutledge Kiyo and Eiko Tomiyasu Professor of Electrical Engineering at California Institute of Technology
  • Douglas Reynolds Professor of Economics at University of Alaska Fairbanks, School of Management
  • Juscelino F. Colares Schott-van den Eynden Professor of Law and Associate Director of the Frederick K. Cox International Law Center at Case Western Reserve University School of Law
  • Stephen Bird Associate Professor of Political Science at Clarkson University
  • Yueming (Lucy) Qiu Assistant Professor of Environmental Resource Management in the Ira A. Fulton Schools of Engineering, and Senior Sustainability Scientist in the Wrigley Global Institute of Sustainability at Arizona State University
  • Christopher R. Thomas Associate Professor of Economics & Exide Professor of Sustainable Enterprise at University of South Florida
  • Benjamin F. Hobbs Schad Professor of Environmental Management and Director of the Environment, Energy, Sustainability & Health Institute at Johns Hopkins University, Whiting School of Engineering
  • Stephanie B. Ohshita Associate Professor of Environmental Science, Studies & Management at University of San Francisco
  • Peter C. Burns Henry Massman Professor in the Department of Civil and Environmental Engineering and Earth Sciences, and Director of the Center for Sustainable Energy at University of Notre Dame
  • Jonathan Rubin Professor of Economics at The University of Maine, School of Economics

Sanya Carley

Associate Professor in the School of Public and Environmental Affairs at Indiana University
Sanya Carley
What are some good tips for saving money on energy bills?

There are many things that one can do to save money on energy bills, although some are harder than others. Beginning with the easier tasks, one can change settings on their household appliances. Instead of turning the refrigerator or freezer to the coldest setting, consider turning it to a medium setting (note the dual benefit: ice cream is tastier this way). Adjust your thermostat by a few degrees so that your house requires less heat in the winter and less air conditioning in the summer. Consider adding an extra blanket to your bed in the winter and dropping the thermostat by a few more degrees during the night. One can also turn the temperature down on their hot water heater or run loads of wash on the cold setting instead of the hot setting. Set computers so that they go into sleep mode after several minutes of sitting idle, and turn them off when they are not in use for any longer extent of time, such as overnight.

While still fairly easy, there are a number of tasks that require a little more work and, sometimes, upfront cost. Instead of drying your clothes in the dryer, you could hang them outside in the sun to dry. You could also swap out your old incandescent bulbs for compact florescent light bulbs, install ceiling fans and run them instead of air conditioning units, turn off the light behind you when you leave a room, and wait until your dishwasher is entirely full before running it. When appliances and other electrical items are not in use but remain plugged into the wall, they are still consuming electricity; this is often referred to as a "phantom load." Electronics such as laptops and cell phones tend to be particularly bad about drawing electricity even when turned off. Consider unplugging these gadgets and other items when they are not in use.

The last set of possibilities requires more work and larger upfront costs. Within this category, I place all tasks related to improving the efficiency of household appliances and building materials. One could swap out their older, less efficient washing machine, for example, for an Energy Star rated front-loader washing machine. Many appliances these days offer an energy efficient option, although they generally — but not always — come with a cost premium. One could also weatherize their home by caulking cracks, sealing in windows and doors, and installing extra installation.

Finally, consider calling your utility company and asking if they offer any services to help you identify ways to be more efficient in your home. Many utilities offer such services for free, and will send someone to your house to prepare a formal or informal audit for you.

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

Millions of people around the country have taken advantage of tax deductions and credits offered by both the state and federal government. These tax incentives generally apply to the purchase of more efficient technologies, such as efficient appliances, solar thermal panels, wood or pellet stoves, or efficient light bulbs. In the sense that we know that these tax incentives have been applied widely, one could argue that they have been effective at enhancing energy efficiency. What we do not know with great accuracy, however, is the percentage of those that accept these tax incentives but would have purchased the more efficient technologies anyway.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

I do believe that the government should continue to support low-income households through energy efficiency services. Lower income populations tend to spend a larger percentage of their income on energy than higher income populations. Providing these types of services, such as those offered through the Weatherization Assistance Program, provide other benefits beyond just energy savings, including health benefits due to decreased exposure to air and water pollution from electricity generation, environmental benefits, and secondary benefits associated with using one's saved income for other basic needs.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

This question moves us from the realm of electricity to that of transportation. The recent decline in the price of oil affects consumers’ interest in fuel economy. When consumers pay handsomely at the pump, they may be more inclined to consider replacing their vehicle with a more fuel efficient option. When gas is cheap, one may be less concerned with how many miles-per-gallon his or her vehicle gets. The real issue here, however, is consumers' predictions about future gas prices, and the degree to which they factor these perceived costs into estimates of their total cost of vehicle ownership. In general, evidence shows that consumers tend to under-value fuel economy and an expectation that gas prices will remain low will likely perpetuate this under-valuation.

Steven C. Hackett

Chair and Professor in the Department of Economics at Humboldt State University
Steven C. Hackett
What are some good tips for saving money on energy bills?

I suggest that people switch out most all of their incandescent lights with compact fluorescent or LED lighting. If you have the space, use a clothes line rather than a dryer on sunny days. Turn off lights when leaving a room. If you live in an area with hot summer days but that cools down in the evening, then consider installing a whole-house fan and turn off air conditioning in the evening. Look into whether there are incentive programs for leasing or installing rooftop solar PV or solar water heating systems if you own a home with good sun exposure.

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

Tax deductions and credits have an important role to play. But people have to be informed of the potential cost-effectiveness of various energy efficiency measures, and that means both consumer education and access to low-cost or free energy audits. While tenants in rental housing usually pay their own energy bills, and have incentive to reduce those bills, there may be a split incentive with the property owner in terms of installing energy-efficient measures. Tax deductions and credits may not be effective when incentives are split between tenants and landlords. And finally, there are many low-income households that do not incur an income tax liability, and so may not be able to harvest tax deductions or credits. Other targeted programs are needed in these cases.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Energy assistance programs are an important way to support people living below the poverty line. When we subsidize energy consumption, however, we reduce a household's incentive to limit energy consumption. Retaining full-price energy but providing periodic targeted rebates to income-qualified households may work.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Yes, low oil prices affect investments in energy efficiency and in renewables. Let's look at an example from the past: Between January 2007 and July 2008 the average price of a gallon of gasoline in the U.S. rose by nearly 80 percent. American consumers responded by reducing gasoline consumption (by an estimated 7 percent in August 2008), increasing public transit ridership (by 5.2 percent in the second quarter of 2008), and buying a record number of hybrid cars. Higher petroleum diesel prices drove up the price of biodiesel, which in turn contributed to the price of soybean oil doubling between January 2007 and April 2008, and a spike in farmland prices. By November 2008, however, U.S. gasoline prices had fallen by 58 percent (relative to July), and hybrid car sales dropped by 50 percent. Clearly consumers respond to price signals, and also to volatility. As renewables become cheaper, however, that sensitivity should decline.

David C. Popp

Professor of Public Administration and International Affairs at Syracuse University, Maxwell School of Citizenship and Public Affairs
David C. Popp
What are some good tips for saving money on energy bills?

Consumers should pay more attention to the potential energy savings of goods, both on simple things like light bulbs and also on major appliance purchases. While appliances with better energy efficiency cost more up front, with lower energy bills consumers can recover those costs in just a couple of years.

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

Potentially, but the more targeted they are the better. If high upfront costs discourage households from investing in energy efficiency, tax credits and deductions can help. But the danger is that much of the value of the credit will go to households that would have made energy efficient investments anyway. Phasing out credits at higher income levels would help prevent that from occurring.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Perhaps a bit (e.g., sales on larger cars are increasing), but previous investments in energy efficiency don't just go away. In past cases when low prices followed a spike in energy prices, energy efficiency did not return to pre-price spike levels.

Cheap oil should have little impact on the transition to renewables. Renewables are primarily the focus of the electricity sector, where oil is not often used. Cheap oil may lead to low natural gas prices as well, but that could help renewables. Natural gas and renewables are often used in tandem. Since renewable energy from the wind and sun is sporadic, other sources of power that can be turned on and off quickly are used to complement renewable production. Natural gas power plants work well for this.

Barry Solomon

Professor of Geography and Environmental Policy in the Department of Social Sciences at Michigan Technological University
Barry Solomon
What are some good tips for saving money on energy bills?
  • Turn lights off when not in use; Install motion detector lights;
  • Buy Energy Star appliances, and consider upgrading to more efficient ones before the end of their useful lives;
  • Run dishwashers and washing machines at full capacity;
  • Replace single pane windows with low-e, double pane windows;
  • Plant deciduous shade trees in front of south facing windows;
  • Use ceiling fans instead of A/C for cooling;
  • Don't heat rooms that are not in use;
  • Shut curtains or blinds on windows at night during cold winter days.
Are tax deductions and credits effective at incentivizing households to be more energy efficient?

Yes, to a point. They incentivize people to buy energy efficient technologies, which may or may not affect how the technologies are used.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Yes. Since low income people pay less, if any taxes, and often rent instead of own their own homes, the best way would be direct assistance for utility bills, if low-income rates are not available.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Oil prices are the single greatest determinant of energy policy, public interest in energy issues, as well as alternative sources of energy. Thus, when the price of oil price declines, it often discourages the greater use of energy efficient technology as well as renewable sources of energy. Fortunately, the price of wind power has also been dropping, and the price of solar photovoltaic cells has been dropping even faster, and a long-term drop in oil prices is not sustainable.

Sarah Jacobson

Assistant Professor of Economics at Williams College
Sarah Jacobson
What are some good tips for saving money on energy bills?

Heating and air conditioning are major household uses of energy, so if you can find ways to minimize those -- with smart thermostat settings, clever deployment of window shades and blinds, more tolerance for cold in the winter and hot in the summer, etc. -- that will help. For electricity, there are interesting solar financing deals right now whereby you can let a company put solar panels on your house, and this lets you avoid the up-front investment cost associated with solar but can dramatically cut electricity bills. It doesn't hurt to be careful on smaller energy uses, too: get in the habit of turning off lights you don't need; switch to LED lights; don't leave unused device chargers plugged into the wall; and use less hot water (e.g., in showers and clothes-washing).

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

It doesn't seem like on their own they have big effects. Some such programs do increase take up of energy efficient devices, but only by a small amount. Some "social" incentives also seem to have small effects: for example, text on an electricity bill that compares this household's use to that of neighbors does change behavior for the better. But I don't think this is a behavioral problem we've figured out how to fully solve.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

This is a hard one, because for environmental reasons we should reduce subsidies on energy in general, but to get rid of energy assistance to low-income households would make some people's lives much harder. A classic way to address this kind of issue would be to get rid of the energy assistance and instead provide cash assistance that is on average the same size as the energy subsidies would have been; then the households can use that money for whatever mix of energy and other goods they would like to buy. In theory, this would leave many households better-off than the energy assistance program leaves them -- and of course it should cost no more to the government than the energy assistance program. Practically, such a program would be difficult to implement, in part because some households (those that tend to use a lot of energy) would be made worse off.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

I have read that the recent oil price drop reduced demand for fuel-efficient hybrids, and so by extension one would expect similar effects for other energy-efficient technology. I'm a bit surprised that this has been observed because most people believe that oil prices will eventually start rising again -- the factors keeping prices low are mostly transitory, and there are fundamental forces that continue to push oil demand up. Fundamentally, increases in energy efficiency and a transition to renewables should proceed apace, eventually. For the short term, perhaps we are in a state where energy efficiency will stagnate for a bit, but that seems less likely for the transition to renewables since that transition is made based on projections over long time horizons.

Mark Jacobsen

Associate Professor in the Department of Economics at University of California, San Diego
Mark Jacobsen
What are some good tips for saving money on energy bills?

Sometimes, making small changes to heavy uses of energy (for example, small adjustments to the time of day heating or air conditioning comes on, or changing the temperature by a few degrees during certain parts of the day) can be equally or more important than very dramatic changes to something that is only a small part of your energy bill. Of course, saving energy across all uses is best! I think the kill-a-watt meters (sometimes available subsidized or free-to-borrow from your local utility) can also give a really nice view into what items in your home are the biggest consumers of electricity.

An interesting recent reference on this point is Pritoni et al. (Energy efficiency and the misuse of programmable thermostats: The effectiveness of crowdsourcing for understanding household behavior, 2015), who find that many thermostat technologies are not being used as efficiently as hoped.

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

They certainly have some visible effects, though I think they are much more effective for certain groups (like homeowners working on a renovation) than they are for others (like renters and many businesses). I think better policy would provide equal incentives across the board, for all users of energy. For example, raising the price of polluting or fossil-based energy through taxes would give an incentive for anyone who is paying for energy to find a way to conserve. As long as another tax (for example the sales or income tax) is reduced at the same time, very strong conservation incentives can be created without increasing the total dollar amount that the government gets in revenue. If the energy taxes fall more on certain income groups than others, then it would make sense for the tax reductions to be targeted so that overall income inequality is either unaffected or improved.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

I think there are much better ways to provide assistance to low-income households than the offer of discounted energy. One difficulty with using subsidized energy prices to help low-income households is that the targeting often fails: we often try to subsidize rates for people who use relatively little energy (the idea being that these are likely to be lower-income households). However, it turns out that many high-income households use relatively little energy (and so are being subsidized by everyone else!) while there are many low-income households that use relatively high amounts of energy and so still pay high energy prices. I think Borenstein (The Redistributional Impact of Nonlinear Electricity Pricing, 2012) is an excellent reference on this: he finds that this strategy of "increasing-block" electricity pricing accomplishes relatively little redistribution to low-income households and comes at very high cost. A second reason I think it is better to assist low-income households in a different way is that low energy prices might have the unintended effect of discouraging conservation. If it is possible to provide other forms of assistance we might be able to help low-income groups while still providing strong incentives to conserve energy.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

The University of Michigan Transportation Institute provides very nice data on car choices and is updated every month. The June 2015 numbers are in and while it may be too soon for a definitive answer, the trend looks pretty flat! We are in a period where fuel economy standards are tightening very quickly, and so we should expect to see rising fuel economy. Instead, with low oil prices, it appears that consumers are choosing larger, thirstier vehicles and so could be holding the trend flat in spite of the tightening standards. I think we'll have a much clearer picture in the next few months as the 2015 model year concludes.

An excellent source on this point is Busse et al (Are Consumers Myopic? Evidence from New and Used Car Purchases, 2013). That paper finds that vehicle consumers respond surprisingly sharply to oil prices: the market share of eco-friendly vehicles drops rapidly in periods of low gasoline price (which of course is closely tied to oil price), while the share of the largest, lowest-MPG vehicles sees a correspondingly large increase. From Busse et al (2013): "A $1 increase in the gasoline price leads to a 21.1 percent increase in the market share of the highest fuel economy quartile of cars and a 27.1 percent decrease in the market share of the lowest fuel economy quartile of cars."

Dave Rutledge

Kiyo and Eiko Tomiyasu Professor of Electrical Engineering at California Institute of Technology
Dave Rutledge
What are some good tips for saving money on energy bills?

I will focus on things that are relatively easy to do that would reduce your home electricity bill. There is no magic in any of these, but my experience is that making all these changes can drop total electricity use by a half.

For electricity, if you still have incandescents, switch to CFLs or LEDs. This is the easiest way to lower your electricity bill. An additional benefit is that you will not have to stock many spare bulbs because CFLs and LEDs last much longer than incandescents. One disadvantage of a switch is that you will not get a reasonable payback time in rooms that are little used. You also need to choose the color temperature carefully.

The next change would be insulation to reduce cooling and heating bills. It is relatively inexpensive to get insulation blown in walls and attics and to add fiber-glass panels in a crawl space under a floor. Extremely effective, but expensive, is adding SIPs (solid insulation panels) under the roof, when the roof is replaced. Less effective, and quite expensive, is installing windows with double or triple glazing, argon filling, low emissivity coatings and internal shades. Additional advantages of these changes are that your house will be more comfortable than it was before, and the changes will help maintain the resale value of the house. A disadvantage is that you will not get a reasonable payback time for the more expensive measures.

A final suggestion would be to look for efficient appliances when you need to replace them. The most important one is the refrigerator, which can use $100 a year of electricity. Ordinarily, the savings are not enough to make the replacement just to get the lower electricity use. Just make sure you compare the electricity cost labels when you would ordinarily be buying an appliance anyway.

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

I have not seen much evidence that they are. The rules are pretty complicated. For example, a wood stove at a primary residence may get a tax credit, but not at a vacation home.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

In California, where I live, the most important energy assistance policy that is aimed at helping low-income households is a strongly tiered electricity pricing system that forces the high electricity users to heavily subsidize low electricity users. One unintended effect of this policy is that a high-income family that buys a solar array becomes a low net electricity user and is then subsidized by a low income family with many children that has high electricity use.

I believe the most effective energy policies for low-income families are ones that encourage oil production for low gasoline prices so that people can afford to drive their cars to work and to encourage natural gas production for low electricity prices so that people can run their air conditioners and heat pumps. It is true that the Obama Administration does not encourage oil and gas production, and the recent astonishing increases in oil and natural gas production have come entirely from U.S. private lands. In fact, oil and gas production has dropped in federal lease areas. I mean the total oil and gas production in energy terms. It was 236Mtoe in 2008, and 203Mtoe in 2013. However, it should be acknowledged that the current high U.S. production will not last forever, particularly for oil. Ask me again in ten years.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Negative. I've just ordered a new van.

"Is cheap oil inhibiting the transition to renewables?"

It shouldn't. In the U.S., oil is mainly used for transportation. Renewables are mainly used for electricity and the installations are driven entirely by government subsidies and renewable portfolio requirements rather than the needs of the grid.

Douglas Reynolds

Professor of Economics at University of Alaska Fairbanks, School of Management
Douglas Reynolds
What are some good tips for saving money on energy bills?

If society wants to save money in general, use more coal.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

No, if you are poor, the best thing to do is to live cheaply. In Alaska, many live in dry cabins with wood stoves, but most are in small apartments. Certainly, SNAP and other programs should be used for the poor.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

I am not sure. One thing is that renewables can work in small situations like remote solar and wind energy. In urban settings, coal and natural gas are the cheapest - renewables are more expensive.

One thing: a gasoline tax is about the best way to induce people to use high mileage cars and the money can be used to rebuild America's infrastructure, so high gasoline and diesel taxes should be advocated.

Juscelino F. Colares

Schott-van den Eynden Professor of Law and Associate Director of the Frederick K. Cox International Law Center at Case Western Reserve University School of Law
Juscelino F. Colares
What are some good tips for saving money on energy bills?

Obviously, reducing consumption; improving insulation; replacing drafty/old windows and inefficient appliances with energy-efficient substitutes are common suggestions. However, greater energy efficiency and lower consumption are the low hanging fruit and people will do well by preparing for greater regulatory stringency on emissions in the future, which should increase the cost of electricity. So, it might be worth it to consider adjusting living space to changing conditions and perhaps reducing commute times. The Millennials are not likely to favor old consumption habits like living in suburbs as prior generations, nor are they likely to buy huge gas guzzlers; so the older generations should adjust their current consumption patterns accordingly.

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

Yes, in the sense that such incentives reduce costs to homeowners. However, only by ensuring that market prices actually reflect the true cost of fossil-sourced energy, can society make the most informed and efficient choices. Currently, the fossil fuel industry and consumers are receiving a subsidy that is becoming more expensive as the effects of climate disruption materialize.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Yes, but the government should also couple such assistance with incentives to reduce consumption. Also, better monitoring and educational efforts should help. But all in society should contribute their share to the cost of adjusting to a lower carbon footprint in the years ahead.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Clearly, cheaper oil does not help with the introduction and further deployment of renewables if current policies remain the same. Ideally, the political class and leaders of this country should take this opportunity (low energy cost) to remove producer and consumer subsidies to fossil fuel production and consumption. Thus, this is a key moment to start actually introducing market principles to this sector of the economy. Politicians who believe in free markets should be the first to favor the end of fossil fuel subsidies and efforts to fully price-in the true cost of emissions to society on the actual prices charged on energy consumed. Otherwise, the entire gain from these energy savings will be kept by producers and consumers will be left without any change in the production and consumption patterns. For instance, the airlines have reduced their fuel cost by almost 50 percent, yet, because of current oligopolistic conditions, consumers get nothing from lower fuels costs (while still being nickled and dimed with fees) and airline executives and shareholders pocket the difference. Society goes on being uncompensated for the true cost of air travel emissions because we have no carbon tax. Yet, economists know renewables can be competitive with unsubsidized fossil fuels, especially as they benefit from scale economies. Pro-market individuals should be optimistic about the ability to reduce emissions if producers, consumers and the government are exposed to the correct incentives. The fossil fuel lobby, on the other hand, has "somehow" persuaded most of such free market politicians.

Stephen Bird

Associate Professor of Political Science at Clarkson University
Stephen Bird
What are some good tips for saving money on energy bills?

The two biggest energy costs in most Americans’ lives are their homes and their cars. For transportation, making the move from a two car to a one car family can be huge, as much as $500+ per month, depending on insurance etc. As for homes, almost every state has some kind of home energy efficiency audit and subsidy program (either through a state agency, or via your electricity or gas utility). These programs are usually very generous with subsidies and/or low/no-interest loans for efficiency upgrades. Why? Because your state would rather you spend your money on state businesses rather than gas or oil from out of state (unless you’re one of the few state exporters). Take the time to find the programs and upgrade your home’s energy efficiency – it’s a hassle, but well worth it.

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

Sadly, not always. This is because there is a serious energy knowledge deficiency, and the payoff usually takes 5-7, or more, years. There is an upfront “bureaucratic” cost to manage the paperwork but it’s well worth it.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Absolutely. Many families in the U.S. are making decisions between heating versus eating in the winter, and in our hot summers we have grandparents who risk heat exposure without air conditioning in our hottest states. Our primary programs (known as LIHEAP and WAP) are not the most efficient way to provide this assistance, and better models exist. That said, both state and national governments are unwilling these days (for a variety of reasons) to tackle the job of creating more effective, efficient, long-term, and comprehensive energy assistance programs.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Both cheap oil and cheap gas (due to the fracking revolution), have dramatically lowered our costs for our two most commonly used fossil fuels. However, it’s complicated. Natural gas has supplanted coal in many cases, a much dirtier and more polluting fuel in terms of air pollution, greenhouse gases, and mercury. And we shouldn’t get too comfortable with low fuel costs for long – they are unlikely to stay with us for the long term. Finally, renewables are becoming cheaper and cheaper – particularly solar and wind, so while the transition has slowed down temporarily, it is not stopping, and will likely ramp up again as conditions change.

Yueming (Lucy) Qiu

Assistant Professor of Environmental Resource Management in the Ira A. Fulton Schools of Engineering, and Senior Sustainability Scientist in the Wrigley Global Institute of Sustainability at Arizona State University
Yueming (Lucy) Qiu
What are some good tips for saving money on energy bills?
  • Install a programmable thermostat to respond to time-of-use electricity pricing;
  • Install trees to benefit from tree shades in the summer;
  • Use energy efficient appliances such as EnergyStar certified products.
Are tax deductions and credits effective at incentivizing households to be more energy efficient?

Yes. But it depends on the location. Usually, utilities companies give out some rebates for some energy efficient appliances such as refrigerators or energy efficient retrofits. Check with your local utilities. State and federal governments can also give out some incentives such as tax credits for electric vehicles.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Drop in oil prices shouldn't impact energy efficiency on a large scale because oil is mainly used for transportation and industrial use. For electricity generation, lighting, heating, and cooling, where energy efficiency plays a role, oil is still not used widely yet. Regarding the transition to renewables, again, renewables such as wind and solar are mainly used for electricity generation, where oil is not widely used. Thus cheap oil shouldn't inhibit the transition to renewables. However, cheap oil does slow down the adoption of electric and other types of energy efficient vehicles.

Christopher R. Thomas

Associate Professor of Economics & Exide Professor of Sustainable Enterprise at University of South Florida
Christopher R. Thomas
What are some good tips for saving money on energy bills?

Keep the thermostat a bit warmer in the summer and a bit cooler in the winter. Be sure to change the air filters regularly. Air filters are cheap, however, they are a hassle to change in most cases. Clean air filters not only lower your bill, they keep your equipment running more efficiently. When you buy filters, typically the best strategy is buying the cheapest ones and changing them often. Skip the premium filters, on a bang per buck basis, they are not worth it. If you really need to filter out tiny particles, pollen and pet dander, then it is best to purchase a separate, dedicated HEPA air purifier. Keep in mind that the HEPA filter will add to your electric bill. There’s no free lunch, just more efficient and less efficient ways to do things.

Locate on Angie’s List a local company to service your equipment. The company that sold and installed your home AC/heating unit is not likely to give you the best price on service. They will try to sell you a service contract, which, in most cases is more costly than hiring the best person on Angie’s List to do the same thing. Be sure you don’t violate your equipment warranty by using a third-party service company.

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

Most of the tax credit programs that I have studied are about break-even projects, if everything works out the way it is supposed to. The attractiveness of many of these programs is based on substantial increases in electricity prices, which may not materialize. While coal generation of electricity is under heavy fire from regulators, natural gas generated electricity is likely to be cheaper than coal anyway. Even if the U.S. DOE hobbles fracking in the U.S., this technology is being deployed worldwide now and will continue to increase global supplies of fossil fuels, regardless of energy policy in this country. At this point in time, I would not bet the ranch on rising electricity prices to motivate, for example, investing in expensive home solar energy to replace electricity from the local grid.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

For the sake of efficiency and fairness to producers, electricity prices should always be set very close to the cost of supplying the electricity, no matter who is consuming it. If we desire to help the poor pay for their energy, then we should rely on a well-designed, direct monthly energy rebate program. “Well-designed” means an energy assistance program for low-income households cannot look at all like our food stamp program.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

No, this is a myth. Cheap (clean) energy is tremendously valuable for creating higher standards of living, especially for lower income households. Less expensive oil increases the amount of energy consumed, which is a good thing because society benefits in many ways from consuming energy. We still need fossil fuels, period. We cannot get from here to the clean energy future that we all want without burning more fossil fuels for now. Global warming is harmful, but it is not going to kill us in the next two decades. Yet, during the next 20 years, we will very likely have the technology advancement we need to create large amounts of clean energy at economical prices. The R&D on new energy technologies is happening now in France, India, China, as well as in the U.S. Fossil fuel sources of energy will face increasing competition from other clean energy sources soon enough that we need not panic now and over-regulate ourselves into pointless economic deprivation.

Benjamin F. Hobbs

Schad Professor of Environmental Management and Director of the Environment, Energy, Sustainability & Health Institute at Johns Hopkins University, Whiting School of Engineering
Benjamin F. Hobbs
What are some good tips for saving money on energy bills?

In hot regions of the country, close off unused rooms and close blinds, and use fans to increase your comfort in rooms you do use. For lights that you use daily, replace them with CFLs or, better yet, LEDs.

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

They play a role in getting the attention of consumers. Unfortunately, they do not effectively reach lower income households whose older housing stock is often most in need of retrofitting.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Bill assistance should be tied, if possible, to energy use audits and retrofits to address the long run problem, rather than just to subsidize (and so encourage) consumption.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

There's nothing like price increases to get people talking about what they can do to save energy, and the reverse is true -- price decreases mean that the subject will be raised less.

All the academic literature shows a response of driving habits and car purchases to the price of gasoline. I haven't seen new Humvees on the road, but in general, lower gas prices has lowered interest in hybrids and electrics compared to where it would've otherwise been. Lower natural gas prices lessen incentives for insulating homes and improving the efficiency of furnaces, and also translate to lower electricity commodity costs, which affect use of air conditioning and incentives for efficiency.

Stephanie B. Ohshita

Associate Professor of Environmental Science, Studies & Management at University of San Francisco
Stephanie B. Ohshita
What are some good tips for saving money on energy bills?

First, an energy audit or review. Understand what services each form of energy is providing: electricity to run the refrigerator, natural gas for water heating. Identify where energy for space heating or cooling is being wasted: through gaps in the framing, un-insulated walls/attics/floors. Consider which appliances could be improved: low-cost low-flow shower heads save water and energy. And always remember the smart, low-tech option: you.

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

Overall, these studies that have been done on the effectiveness of financial incentives for energy efficiency, show a net gain for relatively low government expenditure. When the financial incentives are consistent over time and well communicated, they do encourage households to make changes and improve energy efficiency.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

I do believe it's important to provide energy assistance to low income households so that basic needs can be met. A wise approach is to support energy efficiency and affordable housing. Investments in efficiency keep on giving; for example, properly installed insulation saves energy and money every winter and summer because less energy is needed for heating and cooling. Even more basic and low cost: proper orientation of buildings to the sun and shade trees.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

First, consider the energy services that oil provides. We use oil to power vehicles, to heat buildings in the northeastern U.S., to make chemicals and plastics, and to produce food in the industrial agricultural system. Cheap oil may temporarily reduce the attractiveness of energy-efficient vehicles, divert attention away from improved building insulation, and slow efforts on organic agriculture. For the most part, in the U.S. we no longer burn oil to generate electricity – its liquid form is more desirable as a transportation fuel. Most of the push for renewables is for the generation of electricity, to replace coal.

Peter C. Burns

Henry Massman Professor in the Department of Civil and Environmental Engineering and Earth Sciences, and Director of the Center for Sustainable Energy at University of Notre Dame
Peter C. Burns
What are some good tips for saving money on energy bills?

Specifics depend strongly on the geographic location, and extent of energy use.
  • Home insulation, especially in the attic, is always a good measure;
  • On a cold day, use an inexpensive infrared thermometer to scan inside the house to find locations where significant cold air is coming in, and make modifications to reduce or eliminate the air flow. Doing the same outside the house can reveal places where heat is escaping;
  • As light bulbs in the house expire, always replace them with LEDs. These will last much longer and waste much less electricity;
  • Set the temperature a few degrees lower in the winter and wear a sweater;
  • Drive 55 instead of 70 mph.
Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Yes.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

The low price of oil, and consequently of gasoline, does cause some people to emphasize efficiency less. Standards for vehicle efficiency are currently driven by government regulations and are independent of the price of oil. But the specific cars and trucks that people purchase is impacted by the current and expected fuel cost.

I think the price of natural gas (which is very low) is having a much larger impact than oil, regarding the transition to renewables. Very little electric power is generated by burning oil. Natural gas is now the fuel of choice for electric power generation at many locations. On the one hand, burning natural gas is more environmentally friendly than burning coal. On the other hand, it is still a fossil fuel and burning it contributes to CO2 in the atmosphere. The current very low price for natural gas is certainly slowing the transition to renewables.

Jonathan Rubin

Professor of Economics at The University of Maine, School of Economics
Jonathan Rubin
What are some good tips for saving money on energy bills?

Use less energy! Beyond the basics of turning off lights and reducing heating and cooling loads, purchase more efficient products to replace old ones when they wear out. This is especially true for those that produce or use hot water such as your water heater, dishwasher and washing machine. Check to see if electricity rates vary by the time of day where you live and plan activities such as clothes washing to save money.

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

Yes, but not all programs are equally effective since some consumers would have purchased energy efficient products or cars anyway and simply pocket the tax savings.

Do you believe the government should continue to provide energy assistance to low-income household? If so, what’s the best way?

Being cold in winter or stifling hot in summer is no joke. Governments directly or through utility providers should help out low income households because it is the right thing to do. The best way is to connect short term energy assistance with long term measures such as fixing home insulation and upgrading heating and cooling systems to more efficient models.

What is the impact of the recent oil price drop on energy efficiency? Is cheap oil inhibiting the transition to renewables?

Low oil prices are a signal that energy is cheap and lowers the payback on energy efficiency investments. That makes transitioning to renewable energy more difficult. This is a serious problem.

Methodology

To help consumers budget for costly energy bills, WalletHub compared the 50 states and the District of Columbia across eight key metrics, ranging from the price and consumption of residential electricity to the price and consumption of motor fuel.

The following equation was used to calculate the average monthly energy bill in each state:

(Average Monthly Consumption of Electricity * Average Retail Price of Electricity) + (Average Monthly Consumption of Natural Gas * Average Natural Gas Residential Prices) + (Average Monthly Consumption of Home Heating Oil * Average Home Heating Oil Residential Prices) + (Average Fuel Price * (Miles Traveled/Average Motor-Fuel Consumption/Number of Drivers in the State)) = Average Monthly Energy Bill

 
Source: Data used to create these rankings were obtained from the U.S. Energy Information Administration, the Federal Highway Administration, the U.S. Environmental Protection Agency (EPA) and AAA’s Daily Fuel Gauge Report.

Author

User
Richie Bernardo is a personal finance writer at WalletHub. He graduated with a Bachelor of Journalism and a minor in business from the University of Missouri-Columbia. Previously, he was a…
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Discussion

 
By: Susank1
Jul 20, 2015
I agree with Jackb - your experts completely missed the boat, especially on electricity prices. I live in Oakland, CA. In California, ever since Enron's fake energy crisis, residential consumers have had to pay for electricity with a tiered rate structure based on usage. The idea was to get people to conserve by using a punitive pricing structure in the tiers, and the retail residential price lost its mooring to the cost of production. There read more
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By: Jackb
Jul 14, 2015
I think your experts missed the boat BIG TIME, particularly on electricity.

I lived in San Jose, CA and paid PG&E $0.36/kWh. Then I got Solar from SolarCity (leased) paying $0.19/kWh. I moved to Wichita Falls TX and am paying $0.11/kWh. Even though the temp in TX is hotter, 95 going to 100 degrees this week vs San Jose, CA 75 going to 88, my electric bill is lower, e.g. less $ than CA.
Gasoline - similarly read more
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