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September 8, 2026
Energy affordability is now an everyday kitchen table conversation. Because electricity prices in the United States have risen more than 40% on average since 2020, many families are struggling to pay their utility bills and facing hard choices. Home cooling costs are rising, making it less affordable to turn on the air conditioner. During heat waves, which are becoming more severe and common due to climate change, low-income households must choose between paying higher energy bills to stay cool or living in uncomfortable (and potentially unhealthy) conditions.
Due in part to surging energy demand from data centers, electricity prices increased nationally for families by about 5% in 2025, from 2024 outpacing inflation, and are forecast to continue rising over the next few years. Higher electricity prices translate into higher energy burdens, which measure a family’s spending on energy costs relative to their income. For low-income households, particularly in rural areas, energy bills account for a large share of their annual income. As of 2024, one in four low-income households spent over 15% of their total annual income on energy costs, compared with 1–3% for wealthy households.
Weatherization, or better protecting homes from the elements and making them more energy efficient, can help reduce these energy burdens while increasing resilience and creating economic development opportunities. Weatherization measures like insulation, duct sealing, air sealing, and updated heating and cooling equipment last for years, offering energy savings that can be put toward other uses. Weatherization funds can help protect consumers from fluctuating electricity prices and increase their disposable income.1
For 50 years, the U.S. Department of Energy (DOE) Weatherization Assistance Program (WAP) has provided weatherization assistance to low-income families nationwide to install energy-efficiency upgrades that reduce energy costs. WAP uses Congressionally appropriated funds to help families and homeowners with incomes at or below 200% of the federal poverty line or 60% of the state median income. The program, which is run by states, serves households that have high energy burdens as well as families with children or members with documented disabilities, seniors, high energy users, and renters. WAP is a federal grant program, with allocated funds flowing to states, which then offer free cost-effective weatherization measures to eligible participants. The federal and state governments cover all the costs.2
As well as reducing energy burdens by installing energy-efficiency measures, WAP also offers funds to address health and safety issues in the home. It can help fund the installation of mechanical ventilation (as opposed to combustion vent systems) to ensure adequate indoor air quality, and evaluate for mold and moisture hazards. Performing incidental repairs in homes is critical to extending their lifespan and helping families stay in their homes longer, which also benefits surrounding communities.
According to the U.S. Energy Information Administration (EIA), approximately 44 million households (one in three) reported challenges paying their energy bills in 2024. Energy insecurity in the United States increased from 27% in 2020 to 33% in 2024, disproportionately impacting Black and Latino households. EIA estimates that over 8 million Latino households—half of all Latino households—experienced energy insecurity in 2024. An even higher 55% of Black households reported challenges in paying for energy.
“Households with high energy burdens have experienced the greatest impact of the recent increase in energy costs and face trade-offs among paying rent, paying for prescription medications, and heating and electricity,” said Megan Meadows, WAP director at the National Association for State Community Services Programs (NASCSP). “Weatherization projects to help lower energy costs are more important than ever.”
Since its establishment in 1976 under the Energy Conservation and Production Act (P.L. 94-385), WAP has helped improve the lives of more than 7.2 million households. About 35,000 homes are weatherized annually, supporting 8,500 jobs, and saving each household an average of $372 per year on utility bills (in 2022 dollars). For every dollar invested in weatherization through WAP, about $1.72 is generated in energy benefits and another $2.78 in non-energy benefits, such as improved comfort and productivity, and lower health costs. On average, WAP weatherization measures cost about $4,695 (in 2020 dollars) per residential unit.
As building envelope issues are addressed and energy losses are sealed, less power is needed to run air-conditioning equipment. Using the air conditioner less during the summer means lower energy bills and greater comfort. This is especially important in warmer climates, such as in the Southwest and Southeast.3 The energy savings also make it more affordable for people to turn on their heat in the winter.
DOE provides appropriated WAP funds to states or grantees. State agencies sometimes combine federal and state funds to provide additional weatherization measures for low-income households. States then distribute these funds to subgrantees tasked with delivering energy assistance services to eligible households. Community Action Agencies (CAAs), which are local private nonprofits created under the Economic Opportunity Act of 1964 (P.L. 88-452), help install these weatherization measures for eligible low-income households using WAP and Low Income Home Energy Assistance Program funds.4
State offices have long-standing relationships with CAAs. They combine their resources through flexible general funds and the states then work with CAAs to ensure implementation.5 This way, state governments work efficiently by stretching every federal dollar to offer as many services as possible.
States establish contracts to determine how WAP funds flow from the state to CAAs. CAAs, which have a local presence, have name recognition and established trust within their communities, granting them more opportunities to sit down with households, explain the benefits of energy-efficiency measures, and assist with the necessary paperwork to apply for WAP funds.6
“We have more demand for these funds than supply, and the CAAs have been very successful in helping people in low-income communities get through the door and guide them through the process of receiving much-needed energy efficiency projects to lower their energy bills,” said Kristofor Anderson, director of energy resources at the Georgia Environmental Finance Authority.
Due to inefficient housing stock, households in rural areas face especially high energy burdens—about 40% higher than those of their urban counterparts. The WAP allocation formula has a special allowance for rural areas. Due to the distance (or “windshield time”) between contracting jobs in rural and remote areas, contractors face higher costs for supplies, gas, maintenance, and other expenses. As the mileage between projects increases, the number of potential jobs decreases, making it harder for contractors to turn a profit and increasing the price of their services.7
“To compensate for higher costs due to 'windshield time,’ we have a rural factor in the formula to ensure rural areas receive sufficient funds to support rural households in implementing energy-efficient measures,” said Stephanie Insinna-Sahondo, WAP director at the Colorado Energy Office. “For that reason, the Energy Office works with contractors to train them on rural weatherization jobs and for retention in the program.”
WAP contractor services can be delivered to eligible households through strategic scheduling and routing that minimize unnecessary trips and allow crews to cluster jobs geographically, reducing windshield time. Wherever possible, audits and installations are bundled while funding streams are braided so that a single trip can address as many needs as possible. Rural households with high energy burdens, high energy usage, or vulnerable occupants are prioritized to deliver the greatest benefit in both bill savings and energy or emissions reductions.8 CCAs provide multiple solutions and support local contractors' capacity and skills by creating predictable pipelines of work for them. This helps build long‑term local capacity rather than relying solely on city-based contractors to travel long distances for rural projects and makes it more viable for small rural firms to participate in the WAP program.9
WAP can do more than just reduce energy costs; WAP can also bolster grid stability and help states meet their energy and climate goals. When homes require less electricity and fuel to regulate temperatures thanks to weatherization and energy efficiency upgrades, that translates to lower energy demand and, ultimately, reductions in greenhouse gas emissions. Unlike behavioral changes (like remembering to turn off the lights when leaving a room), weatherization measures result in automatic efficiency improvements.10
“As greenhouse gas emissions are cut by making homes more energy efficient through weatherization and other energy efficiency measures, this aligns with the state’s climate goals,” explained Andrea Bell, executive director of Oregon Housing and Community Services.
The Consolidated Appropriations Act of 2022 (P.L. 117-103) authorized DOE to allocate Weatherization Readiness Funds to state agencies, CAAs, and other grantees to help homeowners address building health and safety issues. Homeowners can be prevented from accessing WAP funds until they address costly housing issues (e.g., roof repairs, electrical problems, insulation, and mold damage). Because homes needing such repairs are often owned by families who lack the resources to address these issues, they end up with high energy bills and energy burdens, which, in turn, makes these homes a priority for WAP funds. Weatherization Readiness Funds can help bridge the gap and are critical for residents who cannot afford to address building issues before installing energy-efficiency measures that can be lifesaving. Addressing health and safety issues leads to non-energy benefits to improve overall quality of life.11
In fact, in 2023, one in five eligible homes were initially deferred from accessing WAP funds due to inadequate housing quality. Approximately 60% of those homes (or 11% of all eligible households) received Weatherization Readiness Funds to pay for health and safety improvements, allowing them to eventually access WAP funds. Projects covered by Weatherization Readiness Funds include roof and electrical repairs, mold remediation, water damage repairs, replacement of outdated electrical service panels, asbestos abatement, repairs to leaking water heaters, and plumbing repairs.
WAP remains firmly an energy-efficiency program and is not meant to be a housing rehabilitation program. However, the DOE allows up to 20% of WAP funds to be used to remove health and safety barriers, thereby enabling states to install energy-efficient retrofits in eligible households.12
The approved fiscal year (FY) 2026 budget for WAP provides $329 million in funding, a $3 million increase over FY 2025. This will provide an average subsidy of $6,500 per participating low-income household. DOE also received about $30 million for the Weatherization Readiness Funds.
WAP has earned bipartisan support in Congress thanks to its clear impact and benefits for families and communities across the country. The bipartisan Weatherization Enhancement and Readiness Act of 2025 (H. R.1355) would amend the Energy Conservation and Production Act to reauthorize WAP and increase the maximum average funding per dwelling unit from $6,500 to $12,000 and the total available funds for WAP to $350 million in fiscal year 2030.
Another bipartisan bill is the Investing in State Energy Act of 2026 (H.R.9894), which would amend the Energy Conservation and Production Act to provide states with financial assistance under the State Energy Program and WAP to support the creation of state energy conservation plans.
Increasing the allowable ceiling for the average project cost per unit will enable more households to receive energy-efficiency measures. With supply and labor costs rising sharply over the last few years, the current $6,500 ceiling is often insufficient to address all the energy-efficiency issues commonly found in eligible homes.13
“Because of WAP regulations requiring a savings-to-investment ratio of 1.0 or greater,14 less funding means prioritizing measures that deliver the highest savings,” said Meadows. “This has led CAAs to cut project costs, meaning paying contractors less or paying for fewer measures that would help families address building envelope issues and lower energy costs. [More WAP funding per unit] is much needed at a time when electricity costs and energy burdens are increasing.”
“WAP is a good program, as it helps a lot of people, creates meaningful energy bill reductions, and lowers impact on the grid,” said Anderson.
Author: Miguel Yañez-Barnuevo
1 In conversation with Andrea Bell, executive director at Oregon Housing and Community Services
2 In conversation with Kristofor Anderson, director of energy resources at the Georgia Environmental Finance Authority
3 In conversation with Kristofor Anderson, director of energy resources at the Georgia Environmental Finance Authority
4 In conversation with Megan Meadows, weatherization director at the National Association of State Community Services Programs
5 In conversation with Andrea Bell
6 In conversation with Kristofor Anderson
7 In conversation with Stephanie Insinna-Sahondo, weatherization assistance director at the Colorado Energy Office
8 In conversation with Andrea Bell
9 In conversation with Stephanie Insinna-Sahondo
10 In conversation with Andrea Bell
11 In conversation with Megan Meadows
12 In conversation with Stephanie Insinna-Sahondo
13 In conversation with Megan Meadows
14 A savings-to-investment ratio of 1.0 or greater means that the lifetime energy savings resulting from the energy-efficiency measures installed should be higher than the investment cost.
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