What Is Energy Poverty? Causes, Impact & a Renewable Future

Imagine living in a home with no furnace and no electricity. You can’t run a refrigerator, a washing machine, or even electric lights. After dark, your kids struggle to do their homework by the light of a single kerosene lamp. Your only heat source is a wood fire. You spend an hour or more each day gathering firewood, and your house is always filled with smoke.

This picture is a reality for billions of people around the world. And there’s a name for it: Energy poverty.

What is energy poverty?

Energy poverty means being unable to meet your basic energy needs. That could mean you simply can’t get enough power for heating, cooking, lighting, and other essentials. Or it could mean you have to rely on fuel sources that are unreliable, unsafe, unhealthy, or unaffordable. One form of energy poverty is energy insecurity, which means not being consistently able to afford clean, safe energy.

Energy poverty is most common in the world’s developing economies. The less developed a country is economically and socially, the less likely it is to have a reliable energy system. This is a self-reinforcing cycle because the lack of reliable power sources makes it harder for these nations to develop. Most energy use takes place not in households, but in business, agriculture, and transportation. Without reliable energy sources, it’s hard for nations to build the industries that could lift them out of poverty.

However, energy poverty also exists in economically developed nations. Although these nations have relatively clean and reliable energy sources, many people can’t afford them.

According to a 2020 paper in Nature Energy, over 17 million U.S. households experienced energy poverty or insecurity in 2015. People with low incomes, especially people of color, are most at risk.

What are the causes of energy poverty?

There are three main reasons for energy poverty. Within a given area, clean and safe energy can be:

• Unavailable. In the many parts of the developing world, modern energy systems simply don’t exist. There’s no electric grid, no gas lines, not even deliveries of fuel oil or propane.
• Unreliable. Where modern energy systems do exist, they’re not always reliable. For example, the electric grid can be unstable, resulting in frequent blackouts. Or, in areas that depend on fossil fuels for heating, fuel supplies may be unpredictable. For instance, Europe is facing possible natural gas shortages due to the cutoff of gas from Russia.
• Unaffordable. Even when there’s plenty of power available, not everyone can afford it. This can be a result of high energy prices, low incomes, or a combination of the two. In 2022, there’s a growing risk of energy insecurity worldwide due to surging global energy prices.

What are some examples of energy poverty?

Energy poverty takes many forms. Here are a few examples from around the world:

• Guinea. A 2007 New York Times story covered students in the African nation of Guinea. At that time, 80% of Guineans had no access to electricity. To study for their exams, students walked miles to the nearest airport and sat under streetlights in the parking lot.
• Ghana. Although over 85% of Ghanaians have access to electricity, the grid goes down all the time. They’ve coined a word, “dumsor” (meaning “off and on”) to refer to these prolonged, unpredictable shifts in power.
• Nigeria. This African nation also has big problems with its electric grid. According to the World Bank, businesses need to rely on generators for power nearly 60% of the time. This raises their cost per kilowatt-hour (kWh) to roughly five times the utility’s rate.
• Eastern Europe. In the former Soviet republics of Eastern Europe, there are many old, inefficient multi-family dwellings. Low-income families living in them can spend up to half their income on utility bills. These buildings also have large carbon footprints because so much of their heating fuel is wasted.
• USA. According to the author of the 2020 Nature Energy paper, some US households spend 10% or more of their income on energy. To pay the bills, some of them go without other necessities like food and medicine. Others keep the indoor temperature set dangerously cold in winter or dangerously hot in summer.

Energy poverty statistics

It’s tricky to figure out exactly how widespread energy poverty is. That’s because there’s no clear cutoff to indicate which households are energy poor and which are not. However, there are a few different measures that provide a clue.

• Total energy use. According to Habitat for Humanity, nearly 3.5 billion people worldwide have limited access to energy. They make up close to half the world’s population, but they use less than 10% of its energy. Meanwhile, 1 billion people in developed nations are using half the world’s energy.
• Access to electricity. Roughly 1 billion people in the world—13% of the population—lack basic access to electricity. That means they don’t have enough for a cell phone charger and nighttime lighting. Most of these people are in Africa and South Asia. You can see from outer space how much darker these areas are at night than more developed regions.
• Clean cooking fuel. About 2.4 billion people worldwide don’t have access to relatively clean-burning fuels for cooking, such as natural gas or propane. Instead, they burn coal, kerosene, or solid biomass such as wood, crop waste, and animal dung. These fuels are highly polluting. Homes that rely on them for cooking have poor indoor air quality that can cause illness.

High as these numbers are, they’re much lower than they were just a few decades ago. In the early 2000s, large parts of East Asia and Latin America were also without electricity. For instance, about 95% of Indonesians had electricity in 2018 compared to just 50% in 2000.

What is the environmental impact of energy poverty?

Energy poverty creates an environmental burden in two ways.

First, it harms the local environment for people who have to rely on dirty fuel sources. Burning dung, crop waste, wood, or charcoal pollutes the indoor air. This pollution can cause a variety of health problems, including heart disease, stroke, chronic lung disease, and lung cancer. According to the World Health Organization, indoor air pollution killed over 3 million people in 2020.

At the same time, energy poverty harms the wider environment. A major cause of deforestation is all the wood that energy poor households have to harvest for heating and cooking. The U.N. Food and Agriculture Organization says roughly half of all wood extracted from the world’s forests is burned for fuel.

However, this doesn’t mean energy-poor people do more harm to the environment than energy-rich ones. In fact, it’s just the opposite. The nations with less energy poverty have much higher greenhouse gas emissions because they use more fossil fuels. And if developing nations address their energy problems the same way, emissions will grow even worse.

To cure energy poverty without harming the planet, we need to help these areas transition to renewable energy instead. Energy in these regions needs to become more accessible, more affordable, and cleaner, all at once.

Is off-grid renewable energy the solution to energy poverty?

Many energy-poor households are in remote areas with no electric service. Unfortunately, expanding the electric grid isn’t always practical. Sometimes the geography makes building too difficult, and sometimes it just isn’t cost-effective.

In these areas, the easiest way to provide clean, affordable power is through off-grid systems. Examples include rooftop solar panels, small solar farms, and mini-grids powered by biogas or hydropower. According to Habitat, there are currently projects like this in several African nations, including Kenya, Nigeria, and South Africa. And new ones are coming online all the time.

However, off-grid renewable energy is not the answer everywhere. In developed nations, many energy poor individuals live in cities with well-developed electric grids. They don’t need better access to energy; what they need is help affording it. For them, better solutions include:

• Home efficiency upgrades to reduce their energy needs and lower their bills
• Switching power providers or signing up for community solar to get a lower rate
• Aid programs such as the Low Income Home Energy Assistance Program (LIHEAP) that help low-income households with energy costs

Solving the puzzle of energy poverty

Energy poverty is an environmental justice issue. Here in the developed world, the average person uses thousands of kWh per year. Meanwhile, the average person in some African nations consumes only a few hundred. The entire nation of Ghana uses less electricity than Californians use on video games. And this lack of energy is making it harder for these nations to develop.

Clearly, it’s not fair to hold these developing countries back in the name of fighting global warming. The challenge is to help them achieve the standard of living economically developed nations have without the same level of emissions.

The best way to do this is with clean energy.

Developing nations need to rapidly expand access to renewable energy, both in the power grid and off it. If they can’t ramp up renewables fast enough, they can at least shift to cleaner fuels in the short term. For instance, liquified petroleum gas can replace coal. Energy efficiency will also play a role, helping to stretch existing energy supplies.

In short, energy poverty is a complex puzzle with many possible solutions. These include:

• Microgrids. These are small, local electric grids powered by renewable energy. They can power refrigerators, fans, farm equipment that can increase crop yields, and lighting for homes and classrooms. The Rockefeller Foundation’s Smart Power India initiative has already helped build hundreds of these in India. Similar initiatives have recently launched in Africa and Myanmar.
• Smart grids. Where the power grid is unreliable, “smart grid” technology can help. It manages power flow to help electricity get where it’s needed more efficiently. For instance, Colombia has successfully deployed Modular FACTS (Flexible Alternating Current Transmission Systems) to power more locations without building new plants.
• Biogas digesters. Biogas is methane produced from organic material. Like natural gas, it can be used for cooking, heating, and power generation. Biogas digesters make biogas from organic waste, which is much cleaner than burning it directly. And the resulting gas can replace firewood, reducing deforestation. In Nepal, hundreds of biogas digesters provide cooking fuel for over 300,000 rural households.
• Building retrofits. Retrofitting old buildings to improve their efficiency can dramatically cut their inhabitants’ heating and cooling costs. According to Habitat for Humanity, retrofitting buildings in Eastern Europe could save residents up to 50% on their heating bills.
• Cleaner cookstoves. In areas without access to clean fuels, more efficient cookstoves can make a big difference. They use less fuel, produce less smoke, and save their owners money. In a study in Kenya, new stoves reduced household fuel costs by $120 per year—around one month’s income. Organizations like FINCA and Our World in Data have programs to subsidize clean cookstoves for families.
• Solar LED lighting. People who aren’t on the grid can still draw on solar power for lighting. Solar LED lights are portable, easy to install, long-lived, and much safer than candles or kerosene lanterns. The Lighting Africa program has already helped provide these products to over 30 million people in sub-Saharan Africa.

There’s no silver-bullet solution to energy poverty. It will require a mix of new clean energy technologies—and maybe even some fossil fuels in the short term. But in the long run, renewable energy is the key to building better lives and a better world for everyone.