The Most—and Least—Energy-Efficient States
Energy bills are one of American consumers’ top household expenses, says personal finance network Wallethub, costing a family on average about $2,000 a year—half of which goes directly to heating and cooling expenses.
But energy consumption isn’t just a hit on individuals’ wallets: The fuel used to produce that energy can have a big impact on the environment—especially if it’s coming from coal-fired power plants.
So making homes more energy-efficient—whether through updated appliances, insulation, or solar-panel installation—can be a double whammy both financially and environmentally. In a McKinsey & Company report, the consulting firm found that if the U.S. invested an estimated $520 billion on energy-efficiency measures today, it would save the economy more than $1.2 trillion in future costs and avoid emitting about 1.1 gigatons of greenhouse gases into the air annually. That’s the equivalent of removing the annual emissions from all U.S. passenger cars.
Most Energy-Efficient States
1. New York
6. Rhode Island
Least Energy-Efficient States
1. South Carolina
7. North Dakota
8. West Virginia
So, how were the states ranked when it comes to efficiently using energy? In its analysis, Wallethub looked at two factors to determine the most energy-efficient and energy-deficient states. First, it looked at “home-energy efficiency,” calculating the total residential energy consumption per household divided by the number of days either below or above the average “degree day” temperature of 65.
Most of the colder climate states ranked better than the warmer states in terms of home-energy efficiency—thanks in part to insulation upgrades, which might be an easier upgrade for wealthy populations in cities like San Francisco but less affordable for others.
“In areas like 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,” said Wallethub analyst Jill Gonzalez.
Having already invested in energy-efficient sources has given some states a head start.
“Some states, like New York and California, have been investing in more energy-efficient sources such as solar paneling for a number of years now,” Gonzalez said. “States like Texas that still rely heavily on traditional energy sources are less efficient.”
For the second measure, the report looked at each state’s car-energy efficiency, taking into account the total amount of miles driven per vehicle and the amount of gallons of gasoline consumed statewide.
States with a lot of hybrids, electric cars, and good public transit in their cities ranked high in this category.
“States can provide residents with alternative means of transport, like upgraded rail, bus, and biking systems,” Gonzalez said. “Enforcing the POV lanes on highways would help in carpooling efforts. And investing in green infrastructure and public transportation will also help states to improve their car-energy-efficiency ranks.”
The report only looked at the lower 48 states, as energy data for Alaska and Hawaii were limited.
For the full ranking, check Wallethub’s report here.