Retail residential electricity prices in the United States have mostly risen over the last decades. In 2022, prices registered a year-over-year growth of 10.7 percent, the highest growth registered since the beginning of the century. Residential prices are projected to rise further, growing by four percent in 2023, when compared to the previous year.
Drivers of electricity price growth
The price of electricity is partially dependent on the various energy sources used for generation, such as coal, gas, oil, renewable energy, or nuclear. In the U.S., electricity prices are highly connected to natural gas prices. As the commodity is exposed to international markets that pay a higher rate, U.S. prices are also expected to rise, as it has been witnessed during the energy crisis in 2022. Electricity demand is also expected to increase, especially in regions that will likely require more heating or cooling as climate change impacts progress, driving up electricity prices.
Which states pay the most for electricity?
Electricity prices can vary greatly depending on both state and region. Hawaii has the highest electricity prices in the U.S., at roughly 43 U.S. cents per kilowatt-hour as of May 2023, due to the high costs of crude oil used to fuel the state’s electricity. In comparison, Idaho has one of the lowest retail rates. Much of the state’s energy is generated from hydroelectricity, which requires virtually no fuel. In addition, construction costs can be spread out over decades.
Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024
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EIA. (August 8, 2023). Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024 [Graph]. In Statista. Retrieved September 19, 2024, from https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/
EIA. "Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024." Chart. August 8, 2023. Statista. Accessed September 19, 2024. https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/
EIA. (2023). Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024. Statista. Statista Inc.. Accessed: September 19, 2024. https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/
EIA. "Year-on-year Growth in Residential Electricity Prices in The United States from 2000 to 2022, with a Forecast until 2024." Statista, Statista Inc., 8 Aug 2023, https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/
EIA, Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024 Statista, https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/ (last visited September 19, 2024)
Year-on-year growth in residential electricity prices in the United States from 2000 to 2022, with a forecast until 2024 [Graph], EIA, August 8, 2023. [Online]. Available: https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/