The History of Energy Inequity in America

When Thomas Edison’s first power plant began operating in lower Manhattan in 1882, it served just 85 wealthy customers in a one-square-mile area. This pattern of bringing new energy technologies to affluent urban areas first would define the American energy system development for decades.

Private utility companies focused on dense, profitable urban markets while largely ignoring rural America. By the 1920s, this created a dramatic “electrical divide.” Cities gleamed with electric streetlights, powered trolleys, and illuminated homes, while millions of rural Americans still relied on kerosene lamps and wood-burning stoves. Electric power transformed economic opportunity. Factories could operate longer hours, students could study after dark, and households could preserve food and pump water. Rural communities without electricity faced increasing economic isolation as the urban economy modernized around electric power.

President Roosevelt established the Rural Electrification Administration in 1935, and it began addressing this divide by providing federal loans for rural electric cooperatives. These efforts reflected the era’s discriminatory attitudes. Many rural electric cooperatives excluded Black farmers and sharecroppers, particularly in the South, forcing them to wait decades longer for electric service.

While rural electrification was expanding access to more Americans, discriminatory practices were shaping urban energy access. Federal redlining, the systematic denial of loans to neighborhoods based on racial composition, directly influenced where energy infrastructure was built and maintained.

Starting in the 1930s, government agencies color-coded neighborhoods based on perceived investment risk. Areas with high populations of African Americans and minorities were marked in red and deemed too risky. These same neighborhoods often received lower-quality energy infrastructure or were served last when utilities expanded their systems. Today, researchers have found that formerly redlined neighborhoods still have higher energy burdens, with residents paying more of their income for electricity and gas than residents of historically white areas.

The post-World War II boom created prosperity, but energy benefits were not shared equally. Federal policies, such as the GI Bill and FHA loans, helped millions of white families purchase homes in new suburbs equipped with modern electrical systems and reliable utility services. Developments like Levittown, the archetypal suburban community built for veterans, explicitly excluded Black families through racial covenants, setting the pattern for segregated infrastructure investment.

These suburban communities received state-of-the-art energy infrastructure, while discriminatory lending practices meant most families of color remained in urban areas with older housing stock, less efficient energy systems, and higher utility costs.

By the 1960s, the environmental costs were becoming clear. Polluting energy facilities were overwhelmingly located in communities of color and low-income neighborhoods. A 1983 study found that three-quarters of hazardous waste sites in the Southeast were in predominantly African American communities.

The 1982 Warren County protests sparked the modern environmental justice movement. When residents of Warren County, North Carolina took to the streets in 1982 to protest a toxic waste landfill planned for their predominantly African American community the modern environmental justice movement began. While protesters couldn’t stop the landfill, their actions sparked a national conversation about environmental racism.

 The 1987 United Church of Christ study, “Toxic Wastes and Race,” found that race was the most significant factor in determining where hazardous waste facilities were located, many of which were related to energy production. 

Dr. Robert Bullard’s groundbreaking research proved this wasn’t coincidence, it was environmental racism. His studies showed that race was the strongest predictor of where polluting facilities would be built, even stronger than income or property values. Communities of color were bearing a double burden: they lived closest to the polluting facilities that generated America’s energy, while often lacking access to reliable, affordable power in their own homes. 

During the 1979 oil crisis, utility shutoffs increased dramatically. Families went without power while energy companies demanded payment of bills. Energy assistance programs were overwhelmed, and emergency shelters filled with people who couldn’t afford to power their homes.

Fast forward, and the promise of deregulation in the 1990s was that competition would benefit everyone. But market-based solutions often made inequality worse. Wealthy customers could shop for the best deals, while low-income customers and those with language barriers fell victim to predatory salespeople peddling confusing contracts with hidden fees.

When Hurricane Katrina’s floodwaters receded in 2005, they exposed how decades of energy inequality had created communities with vastly different abilities to survive and recover from disaster. The most severely affected neighborhoods, predominantly low-income and African Americans, experienced the longest power outages and slowest recovery. While affluent areas had power restored within weeks, some communities waited months for electricity to return. In the Lower Ninth Ward and other predominantly Black neighborhoods, aging electrical systems were more vulnerable to flooding. Emergency backup power was scarce. Evacuation plans assumed residents had cars and resources to leave quickly. Many residents never returned, in part because energy infrastructure was never fully restored.

Hurricane Sandy in 2012 revealed identical patterns on the East Coast too. Public housing residents in New York, predominantly people of color, lost power for weeks, trapped in high-rise buildings without elevators, heat, or hot water. Meanwhile, Wall Street trading floors with backup generators were operational within days. 

As a result, early solar adoption was concentrated among wealthy, predominantly white homeowners who could afford the $15,000 to $30,000 upfront costs. Meanwhile, low-income households and communities of color continued facing high energy burdens while watching their wealthier neighbors’ electric bills shrink to nearly zero. Without intentional policies to address these barriers, clean energy could likely become another luxury available only to those who could afford it, widening the energy equity gap rather than closing it.

Recognition of these problems has sparked innovative approaches that prioritize equity in clean energy deployment. Community solar programs now allow multiple households to share the benefits of solar installations, making clean energy accessible to renters and those without suitable rooftops.

Targeted incentives provide larger rebates and subsidies for clean energy installations in disadvantaged communities. California’s Self-Generation Incentive Program offers higher payments for battery storage in communities most affected by power shutoffs. 

Workforce development programs create pathways for residents of disadvantaged communities to access good-paying jobs installing solar panels, retrofitting buildings, and maintaining clean energy systems. Community benefit agreements ensure that large renewable energy projects provide jobs, training, and other benefits to nearby communities rather than extracting resources and leaving nothing behind.

But challenges remain. Many programs still struggle to reach the communities that need them most. Complex application processes, language barriers, and limited outreach often prevent low-income households and communities of color from accessing clean energy benefits.