By Gavin Maguire
The US is hoping to play key leadership roles in an array of areas tied to the global energy transition, from developing corporate champions that drive emissions reductions to funding research and development of clean-burning fuels.
But while the global community will welcome American ingenuity being deployed to help solve climate-related challenges, many will be wary of following the United States’ example in terms of electricity use per household, which on a per capita basis is by far the highest of any major economy.
Each person in the United States consumes 12.87 megawatt hours of electricity per year, according to think tank Ember, which is three and a half times more than the global average, and over twice as much as the average person in Europe.
In turn, electricity generation is the second largest source of greenhouse gas emissions in the United States after transport, accounting for 25 per cent of national emissions in 2021, according to the US Environmental Protection Agency.
As the American auto fleet becomes increasingly electrified and more factories look to switch energy sources from burning fossil fuels to drawing power from the grid, the country’s demand for electricity looks set to only increase going forward.
That means power producers may need to continue relying on fossil fuels to generate electricity even as record volumes of renewable energy are deployed across US grids, which may hinder emissions reduction efforts despite ambitious pollution-capping goals.
A key driver behind America’s outsized electricity consumption is the preference for single family homes over all other types of residences.
Detached single family homes made up about 62 per cent of all US housing stock in 2020, or about 77 million of the 123 million housing units in the country, according to data from the US Energy Information Administration (EIA).
Large apartment buildings accounted for the second-largest share of dwellings, and totalled around 23 million units, while smaller apartment buildings, attached single-family houses and mobile homes made up the remainder.
For many in the United States, owning your own home is a key part of the so-called American Dream.
A 2022 survey by financial services firm Bankrate found that more people (74 per cent of respondents) cited home ownership as the most important prosperity metric than being able to retire (66 per cent), owning an automobile (50 per cent) or having children (40 per cent.)
However, having one’s own separated patch of land comes with a cost, as heating and cooling detached dwellings costs more and is far less efficient than heating and cooling larger buildings that contain multiple households.
According to the EIA’s latest Residential Energy Consumption Survey 57 per cent of electricity used by detached households is used for space heating, and 64 per cent for air conditioning.
That compares to 22 per cent for heating and 18 per cent for air conditioning in large apartments, and highlights the significant waste loss encountered by detached home owners when it comes to keeping household members comfortable year-round.
A key part of the problem for many detached home owners is the home’s age, as 65 per cent of all US housing units were built before 1990, and 37 per cent were built before 1970, EIA data shows.
Such old homes inevitably struggle with drafts, poor insulation and ill-fitting windows that lead to heat loss in winter and overheating in summer.
Tax credits are being made available for home efficiency improvements via the Inflation Reduction Act passed in 2022, but with the cost of living running high just as interest rates scale their highest levels in years, household spending across the United States has slowed, denting efforts to elevate nationwide efficiency standards.
OTHER WAYS OF LIVING
The United States is not alone in facing rising living costs while trying to improve the efficiencies of buildings.
However, no other region favours single family homes over other types of dwelling to the same degree, and so other countries face slightly easier challenges in terms of enabling building upgrades.
In the European Union, roughly 53 per cent of the population lives in a house, while 46 per cent live in apartments.
In cities, 71 per cent of the EU population lives in apartments, which accounts for the region consuming less than half of the electricity consumed per capita than in the United States.
Differences in home ownership are also key, as nearly half of the populations in key economies such as Germany, Austria and Switzerland are tenants rather than home owners, with their apartment buildings typically owned by pension funds that have a vested interest in ensuring high efficiency standards.
Similarly, a vast majority of China’s population lives in apartments, and apartments are more popular than individual houses in the cities of India, Japan and Southeast Asia.
In Africa, which will see larger population growth than any other region over the remainder of this century, apartments are also becoming increasingly popular among urban dwellers.
If that trend continues, then electricity consumption totals per person in Africa and other major emerging markets are more likely to resemble the relatively low per capita use trends seen in China and Europe.
But if global populations develop a taste for American style homes, then electricity demand levels could quickly jump to twice as much, and upend efforts to constrain overall energy generation totals and associated emissions.