Electricity prices are on the rise. Is it inflation or an underlying issue?

The sun is burning a hole in Americans’ wallets. Back-to-back months of heat records and sweltering days have contributed to rising electricity costs, and experts say that without action, it’s a problem that will likely only get worse. 

According to CBS News’ price tracker, the cost of electricity has increased from $0.14 per kilowatt hour in 2019 to $0.18 per kilowatt hour in 2024 — a change of more than 28.5%. The average American is now paying nearly $300 a month just in utilities. 

For many people, it just isn’t affordable. 

“Sometimes I have to choose whether I’m going to pay the light bill or do I pay all the rent or buy food or not let my son do a sport?” Stacey Freeman, a 44-year-old North Carolina mom told KFF Health News.

Her energy bills have cost her hundreds a month, even as she relied on window units and space heaters in the summer and winter. 

Freeman’s situation is known as “energy poverty,” or the inability to afford utilities to properly heat or cool their home. 

A 2022 study published in Nature Communications found that 16% of U.S. households experience energy poverty, which researchers defined as spending more than 6% of household income on energy expenditures. It’s not a problem solely for those who are considered low-income. The study found that 5.2 million households that live above the poverty line face this issue, with Black, Hispanic and Native American communities feeling a disproportionate impact. 

“Energy inequity is an issue of increasing urgency,” the study says. “…creating a federal energy poverty line would be a critical step in identifying families that face large disparities in access to affordable electricity and energy in the U.S. and improve programs’ abilities to address energy burdens.”

The cost of electricity is based on a multitude of factors, including the volatile prices for natural gas, wildfire risk, electricity transmission and distribution, regulations and, the one factor Americans know all too well, inflation. But experts say there’s an underlying problem that, unlike inflation, isn’t going away anytime soon — the heat. 

An unreliable national grid 

Recent years have seen back-to-back heat records across the world, including in the U.S. Rising temperatures fuel extreme weather events, such as heat waves in the summer and snow storms in the winter, which then increases energy consumption as people try to keep their homes warm or cool. It also increases the costs for the utility companies themselves to make sure that the electric infrastructure can handle it. 

Currently, it can’t.

Power outages remain a major problem across the U.S. When Tropical Storm Ernesto passed by the U.S. Virgin Islands and Puerto Rico earlier this month, it knocked out power to hundreds of thousands of residents. At one point, nearly half of Puerto Rico and almost all of USVI were without electricity.

But it’s not just the islands — it’s the mainland too. Of all the major power outages in the U.S. from 2000 to 2023, scientists at the nonprofit Climate Central found that 80% were because of weather. 

Every four years, the American Society of Civil Engineers issues a “report card” on how U.S. infrastructure fares in a variety of categories. In the latest report, the energy sector received a C-. 

Engineering experts acknowledged that spending on transmission lines had grown and that utilities were being proactive about strengthening the national grid, but said that “weather remains an increasing threat” that is continuously causing power outages. Transmission and distribution systems are a major concern, they said, and “is likely to accelerate as the impacts of climate change persist and the public’s expectation of more reliable, ‘always-on’ electricity increases.”

“While the weather has always been the number one threat to the energy sector’s reliability, climate change has only exacerbated the frequency and intensity of these events and associated costs,” the report states. “The Department of Energy (DOE) found that power outages are costing the U.S. economy $28 billion to $169 billion annually.” 

Multiple polls and studies show how pervasive energy poverty and the heat can be. An early August poll by The Associated Press-NORC Center for Public Affairs Research found that 39% of Americans say that heat has had a “major impact” on their electricity bills, with another 30% identifying a “minor impact.” About 40% of poll takers say they also had unexpected utility expenses because of extreme weather events, including storms, flooding, heat and wildfires. 

The heat isn’t just costly, it’s also dangerous. Extreme heat is the No. 1 weather-related killer in the U.S. and is known for exacerbating cardiovascular and respiratory conditions. The cold is also a concern, with the EPA reporting that more than 19,000 Americans have died from cold-related causes since 1979.

“Not only are households living in more poverty and closer proximity to highly polluted areas at greater risk of adverse health impacts,” the 2022 Nature study says. “They must also consume more energy to overcome the particulate emissions, which, themselves, reduce the efficiency of clean sources such as solar panels.”

A solution for cheaper energy 

Experts say there is a long-term solution that can drastically help — clean energy. 

In 2023, about 60% of U.S. electricity generation came from the burning of fossil fuels, one of the primary drivers of rising global temperatures, according to the Energy Information Administration. Renewable energy has hit record highs, but last year, it was only used for 21% of electricity generation. 

A March 2020 study found that the continued warming of the planet could take a significant toll on U.S. energy infrastructure as-is. Specifically, the study found that the most costly aspects will be the reduced lifespan of substation transformers and the increased need for vegetation management expenditures.

“Total infrastructure costs were found to rise considerably, with annual climate change expenditures increasing by as much as 25%,” the study says. “The results demonstrate that climate impacts will likely be substantial, though this analysis only captures a portion of the total potential impacts.” 

They found that if the U.S. were to more aggressively tackle climate change, it could reduce the expected costs by as much as 50% by 2090. 

Expanding clean energy has already proven to help communities. 

In July, the think tank Energy Innovation found that “states with high levels of wind and solar generation like New Mexico, Iowa, and Oklahoma have experienced the lowest rate increases” in energy bills. When Hurricane Ian hit Florida in 2022, a community that runs completely on solar power managed to escape relatively unscathed while the areas around it faced rampant destruction. In 2021, The Center for American Progress found that investments in clean energy infrastructure could save U.S. households $500 every year just on energy costs. 

And this is why it’s critical for better policy and funding, experts say. 

“Clean energy technologies are expected to continue to decline in costs, enable substantial emissions reductions in the electricity sector without increasing costs,” Energy Innovation found in its report this year, noting, however, that it is up to regulators and policymakers to ensure that consumers are not hit with “unnecessary costs and risks” associated with the transition to clean energy.

Better planning, competitive resource procurement, grid-enhancing technologies, cooperation enhancement, and other strategies could help alleviate that issue, the group said, adding, “Regulators and policymakers have a range of tools they can deploy to mitigate pressure on rising rates, ensuring an affordable and accessible transition to clean electricity.”