There are major inequities in the distribution of costs and benefits within the U.S. energy system. Some households, particularly low-income; Black, Latino, and Indigenous; and other households of color, spend a disproportionate share of their income on home energy costs. Without thoughtful intervention, the benefits of federal clean energy investment, particularly job creation and access to clean energy, will not be spread equitably across income groups, races, ethnicities, geographies, and gender identities.

This inequitable distribution of the costs and benefits of the energy system exists against a backdrop of long-standing environmental and economic inequity in the United States, caused by compounding racial, gender, and geographic discrimination and unjust policies throughout the country’s history. Strategic spending and policy design can contribute to a more equitable clean energy transition. However, structural and contextual changes are also necessary.

The federal government has several methods for targeted investments that can be used to address inequities faced by individuals, households, and communities that experience disproportionate energy burdens or receive fewer benefits from the energy system. Targeted federal investment—including direct payments, grants, loans, loan guarantees, and technical assistance and training—could advance equitable access to clean energy and its social, health, environmental, and financial benefits.

Targeted federal spending should be paired with policies and additional spending that will increase their impact and effectiveness while supporting families and wealth building. We recommend policymakers and implementing authorities:

  1. Review existing forms of directed federal spending and programs for their suitability to address energy inequity through targeted investment, improve them, and extend resulting enhanced targeting methods to other federal investment.
  2. Implement effective, data-driven, and results-focused programming on energy equity issues by cultivating metrics, reporting requirements, qualitative and quantitative data sources, and analysis that is grounded in the experience and input of target households and communities.
  3. Address the marginalization of disadvantaged communities, which have less available resources to design, secure, and implement federally funded clean energy programming. Build the capacity of states, local governments, community groups, and other representatives of disadvantaged communities to lead on co-creating opportunities, applying for federal funds, and engaging with or implementing programming.
  4. Bring the interests of communities that have historically been excluded to the forefront of federal spending, while equipping and empowering these actors to lead in program design, implementation, and monitoring. Incorporate advance planning, community-led project design, and funding for robust, inclusive, respectful, culturally sensitive, and intentional community partnership.
  5. Ensure clean energy spending creates pathways to high-quality jobs for a diverse workforce. Require jobs created through federal spending to meet wage standards, protect the right to organize, enforce anti-harassment and antidiscrimination protections, encourage local hiring and engaging minority-owned and women-owned businesses, and train and equip currently underrepresented members of the clean energy workforce to capitalize on new opportunities in the sector.
  6. Support inclusive financing approaches to deploy clean energy and energy efficiency in low-income communities; Black, Latino, and Indigenous communities; as well as other communities of color.