Solar panel

Renewable Energy Can Combat Economic Disparities

Renewable Energy Can Combat Economic Disparities for Underserved and Underrepresented Communities

Working with community initiatives, offering training opportunities, energy sources, and exposure to the industry, and hiring within these communities would help stimulate economic growth.

Low-income households face an unfair disadvantage when it comes to the money they spend on energy. While the average American spends a mere 2.9% of their income on electricity, low-income households spend about 8.8% of their income. While their overall spending on electricity may be lower, the expenditure on electricity is a higher percentage of their income.

Even though low-income households spend more on energy and the use of renewable sources of energy such as solar power can positively impact the amount they spend, the primary beneficiaries of cheaper energy have always been middle-class families. There can be a more equitable division for energy sources ‘ electricity consumption by increasing the access of renewable power sources to underserved and underrepresented communities.

How Renewable Energy Can Combat Economic Disparities

Electricity generated from fossil fuels still accounts for over 84% of the total electricity consumed by the world. Fossil fuels, including oil, coal, and natural gas, are non-renewable sources of energy and have a devastating impact on the environment. Suppose more and more consumers – residential, industrial, or commercial – switch to renewable sources. In that case, it can account for a drastic reduction in pollution and also reduce the overreliance on fossil fuels.

There are numerous benefits of renewable energy. Not only does the use of renewable energy have a positive impact on the environment, but it can also have social and financial benefits for a community and its people.

Decrease in Energy Costs

Using renewable sources of energy such as solar power can help reduce the amount households pay for electricity. If you decide to install solar panels, you can save a lot of money on your energy bills. The amount of money saved on electricity bills will rely upon many factors, including the place where you live, your average energy consumption, and the cost of installing the solar panels.

The major disadvantage, though, is how expensive the initial investment can be. If the price of solar panels is stopping you from choosing them, then you can opt for companies that will install and maintain solar panels for you. The company will usually require you to pay in installments or a subscription to use the solar panels.

Even with the high upfront cost, renewable energy sources, including solar panels, will save you money in the long run by reducing the operation costs. Traditional power generators operate on fuel, and the price of energy tends to fluctuate. There can be a sudden rise in the price of gas, and that would lead to increased costs of operating your generator. Using solar panels means that your costs of operation remain stable. They might still need repairs or require maintenance, but the costs associated with their function are substantially low.

Create More Jobs

When new renewable energy projects get established, people and communities benefit immensely from them. They create a new avenue for employment. Not only do they use local labor, but they also source materials and services locally that help the community out.

Even though renewable energy only accounts for 5% of the total energy output used by the world, it employs many people. In 2015, solar energy contributed about 2% of the generated electricity in the United States but employed 43% of all people in the energy sector. Wind energy accounted for 6.8% of the total power produced but employed 11.6% of the total number of people in power generation-related jobs.

In 2019, there were 11.46 million people employed in the renewable energy sector. This raise is significant, considering that in 2013, there were only 5.55 million people employed in an industry related to renewable sources of energy. As the need and popularity of the renewable energy sector grow, the number of people they will hire will also rise. The industry can provide numerous jobs, including positions in engineering, management, sales, and manufacturing.

Stimulate Local Economy

New energy projects have the potential to create new factory towns. Factory towns or company towns usually got established around a major factory or industry. They utilized local labor, used locally available materials, and used the services of the community banks. They had a unique ecosystem, and the towns thrived. With the manufacturing shifting overseas, factory towns are no longer as prevalent as they used to be. With the rise in the establishment of new energy projects, factory towns can once again thrive.

According to studies, new renewable energy projects help boost the local economy of a place. With the establishment of new projects, previously underserved communities can benefit financially. A large industry will invest in the community and the people living in it, which usually gives rise to booming smaller businesses. When a new energy project establishes itself in an area, it will mean substantial job growth for that area.

In addition to creating jobs directly related to the energy project, the need for services will arise. When the employees are not working, there needs to be something for them to do, somewhere for them to eat, and a place where family members can visit if they come from out of state. These services range from entertainment and restaurants to hotels and stores for everyday essentials. This need creates a demand for those services, and as a result, creates even more jobs.

Increase Property Value

The use of renewable sources of power can help people save money in the long run. It also contributes to less use of fossil fuel-powered electricity. With the population growing increasingly aware of the environmental impacts of the widespread use of fossil fuels, there is a growing demand for renewable sources of power for residences. Installing solar panels can help increase the value of your property. If you are interested in selling your house, solar panels can bring in more money and help you sell the house faster.

Renewable sources of energy are especially beneficial for low-income households. A study conducted in 2015 showed that a typical set of solar panels could help with over half the energy used by an average low-income family, which can help them save money on power bills.

You might also interested in: The Benefits And Growth Of Solar

Renewable Portfolio Standard: Using Renewables to Combat Inequality

According to a report published by the Institute for Policy Studies, titled ‘How States Can Boost Renewables With Benefits for All,’ the surefire way to promote the transition from fossil fuel-driven power to renewable energy sources is through Renewable Portfolio Standards (RPS).

The report considers RPS to be the most effective strategy to reduce reliance on fossil fuels and uplift low-income households by advancing renewable energy sources. The RPS incentivizes the utility companies that use solar and wind power and specifically provides clean energy sources to low-income families. Twenty-nine states, plus the District of Columbia and Puerto Rico, already have requirements for RPS. Utility companies have to provide a certain percentage of electricity from renewable sources. There are timelines in place by which energy companies must abide. Eight other states have goals regarding energy, but the requirements put forth by them are entirely voluntary.

Fortunately, states can take the following steps to promote the use of renewable energy:

Enact RPS in States

Currently, thirteen states neither have RPS nor a voluntary energy goal in place. Eight other states only have a voluntary energy goal. To promote renewable energy sources, such as solar power or wind power, they can choose to enact RPS and compel the utility companies to switch to cleaner energy.

The implementation of RPS faces several problems, including pressure from the coal industries. The states of Kansas and West Virginia decided to repeal their binding RPS.

Move to a Faster Timeline

Some of the states, such as Hawaii, have an aggressive goal for switching to renewables. The goal is to switch to 100% renewable energy by 2045. Other states, including Michigan, have a weaker standard in place, where the purpose for renewables is a mere 15% of the total energy by 2021. Most states can benefit from a faster timeline to switch to renewable energy without being significantly inconvenienced. It is feasible for most states to enact a fast-track timeline because most of the energy used by residential or commercial consumers comes from solar or wind power.

Plus, there are plenty of options for switching, with new efficiencies continuing to evolve daily.


While renewables like solar panels can have a high upfront cost, they tend to save the consumer more money in the long run. The states can provide financial incentives to those who adopt solar panels to help low-income households switch to solar power. Promoting the use of shared solar in residential complexes is another way to help more people switch. The widespread adoption of renewable sources of energy can help reduce inequality by providing underserved communities, such as low-income households, with a way to save money and end the disparity in consumption.

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