From Renters to Small Businesses: Who Loses When States Cut Efficiency Programs?

States across the Northeast and MidAtlantic have spent years strengthening equity in their energy efficiency programs. Community partnerships have grown, participation gaps have narrowed, and policies have evolved to ensure that underserved households and small businesses gain access to the benefits of energy savings.  

But new proposals to cut, cap, or divert efficiency funding threaten to undo that progress.  At the same time, federal funding remains uncertain, making state-level rollbacks even more consequential. Even when proposals claim to protect income-eligible programs, the reality is that cutting the broader energy efficiency portfolio undermines the very workforce, infrastructure, and community trust that make programs possible.

This moment calls for clarity about what’s at stake – and why preserving a full suite of energy efficiency offerings is essential for affordability and equity.

Who Participates Matters – and States Have Been Making Real Progress  

Energy efficiency has long been one of our lowest-cost, most reliable energy resources. A kilowatt-hour saved costs less than a kilowatt-hour generated, and reducing demand lowers systemwide costs for all customers. Efficiency programs ease pressure on the grid by reducing energy use and peak demand, helping utilities and states avoid expensive infrastructure upgrades, cut fuel costs, and ultimately save billions for customers across the region. Everyone benefits from a more efficient energy system – participants and non-participants alike.

But participants gain an additional, direct benefit: immediate lower bills and reduced exposure to future price spikes.  Yet for years, participation skewed toward higher-income households and well-resourced businesses. Research showed that many groups were far less likely to access energy-savings upgrades - including low-to-moderate income households, renters, communities of color, rural residents, non-English speakers, and small businesses with limited capacity. These disparities meant that the very communities who could benefit most from lower energy burdens were often the least likely to receive upgrades.

States, communities, and partners responded by investing in community-centered programs, building trust with community partners, strengthening policy requirements to ensure that a minimum threshold of savings and investments go to under-served communities, and making changes to cost-effectiveness criteria to improve program equity. Mass Save’s Community First Partnership program is a strong example of this shift. Now working with 58 municipalities and community-based organizations, the initiative reaches renters, landlords, income-eligible households, language-isolated households, and small businesses – groups across the state that have historically faced barriers to participation. Regional organizations like NEEP have supported these improvements by helping states center equity in metrics, and documenting progress on equity and other policies in our Regional Roundup.

None of this progress happened overnight. It reflects years of community engagement, trust-building, and policy reform to ensure that efficiency programs reach the people and businesses who need them most and have too often been overlooked.

Why Cutting Programs Threatens Equity – Even When Income-Eligible Programs are “Protected”

Recent proposals to cut, cap, or divert energy efficiency funding risks unraveling this progress. In Maryland, for example, a proposal to roll back the EmPOWER energy efficiency program would eliminate gas utility-administered efficiency programs and weaken electric utility savings targets. While such proposals claim to preserve income-eligible offerings, that promise doesn’t hold up under scrutiny. 
 
Here are a few reasons why:

• Equity is broader than income-eligibility. Renters, small businesses, rural communities, and non-English speakers all rely on programs that are not strictly income based.
• Programs depend on a strong, skilled workforce. The same contractors, auditors, and outreach teams serve both market and income eligible programs. Cutting the broader portfolio shrinks the workforce and the capacity to deliver income eligible services.  
• Community trust is hard to build and easy to break. Scaling back programs disrupts partnerships that took years to build, especially in communities historically underserved by energy initiatives.
• Equity will not survive in a silo. It depends on a healthy, well-resourced ecosystem of programs.  

To Protect Equity, States Must Preserve a Full Portfolio  

A robust efficiency portfolio does more than deliver energy savings – it sustains the entire ecosystem that makes those savings possible. 

It supports a stable, well-trained workforce, ensures consistent outreach and education, and allows programs to remain flexible enough to meet the diverse needs of communities. It also delivers systemwide savings that help keep energy affordable for everyone. Rolling back programs now would not only raise costs but also reverse the hard-won gains in equitable access.

The Bottom Line

Energy efficiency remains one of the most powerful tools states have to lower energy costs and support vulnerable communities. Everyone benefits from lower system costs, but equitable participation ensures that underserved households and small businesses share directly in those benefits.

States have made important and meaningful progress toward more inclusive, community centered programs, built on years of meaningful engagement and policy reforms. Preserving that progress requires maintaining a full suite of energy efficiency offerings, not narrowing them. The stakes are high, and the gains are worth protecting.