Meeting the national demandIn 2022, retail electricity sales in the U.S. amounted to some 3.9 petawatt-hours, after having experienced an overall growth of 15 percent since the beginning of the century. As the economic sectors of this country rely more and more on this form of energy, in a process of electrification made urgent by the decarbonization imperative, the electricity demand of the U.S. is forecast to surpass five petawatt-hours by 2050.
Although the U.S. is the second largest electricity producer in the world, ranking only behind China, it has become increasingly more reliant on electricity imports in the past decade. To meet its demand, it imported almost 57 terawatt-hours of electricity in 2022.
How much does electricity cost in the U.S.?In 2022, the average retail electricity price in the United States surpassed 12 U.S. cents per kilowatt hour. Despite being the highest price reported in at least three decades, the North American country still ranked among the mid-to-bottom tier of household electricity prices worldwide, far below that of countries like Germany, the United Kingdom, and Japan. Generation costs were the largest component of electricity prices in the U.S., followed by distribution.
Overall, electricity prices are influenced by a myriad of factors, including regulations, power plant operating costs, expansion and maintenance of transmission and distribution lines, and costs for fuels such as natural gas and coal (which make up the largest share of electricity generation in the U.S.). As a result, prices vary significantly across sectors and states. As a rule, the price of electricity for the residential and commercial sectors is usually greater than for industries, as distribution to the latter is more efficient due to the higher voltages used. In terms of regional distribution, due to its remote location and dependence on fuel imports for electricity generation, Hawaii had the highest residential electricity retail prices.