Energy consumption is a crucial consideration for real estate investors for several reasons, influencing the potential returns, risks, and long-term value of their investments. By prioritizing energy efficiency in their investments, investors can improve profitability, enhance the attractiveness of their properties, and align with emerging market trends toward sustainability. In this article, we examine states with high per capita energy consumption and carbon emission levels. We'll start by analyzing how these metrics vary across states, considering all sectors, and then delve into a detailed analysis of each specific sector.
In the map below, darker colored areas indicate states with higher per capita energy use levels. Among the mainland states, Louisiana, North Dakota, and Wyoming stand out, with per capita energy consumption exceeding 800 million Btu, reflecting the significant impact of their energy-intensive industries and lower population densities. In contrast, states like New York, California, and Massachusetts exhibit much lower per capita energy use, often attributed to their higher population densities, more energy-efficient infrastructures, and greater reliance on public transportation. These differences highlight the diverse energy profiles across the United States, driven by varying economic activities, climates, and urban planning strategies.
Residential sector
Wyoming consistently ranks among the highest in per capita residential energy consumption. This is due to its cold climate, which drives high heating demands, and the prevalence of large, detached homes. Additionally, the state relies heavily on coal for electricity, leading to higher per capita carbon emissions. Similar to Wyoming, North Dakota's cold winters result in high per capita energy use for heating. The state's small population, coupled with energy-intensive living conditions, contributes to its high per capita carbon emissions.
In contrast, California has one of the lowest per capita residential energy consumption levels despite being the most populous state. This is largely due to its mild climate, energy efficiency standards, and smaller average home sizes. The state’s reliance on renewable energy also helps keep per capita emissions relatively low. In addition, New York's high population density and urban living conditions contribute to its low per capita residential energy consumption. The widespread use of multifamily housing, which is more energy-efficient per capita than single-family homes, and the state's focus on clean energy sources help maintain low emissions.
Transportation sector
Wyoming also ranks high in per capita transportation energy use due to its rural nature, requiring long travel distances, and a lack of public transportation infrastructure. The state’s reliance on vehicles with lower fuel efficiency further increases per capita carbon emissions. New York has one of the lowest per capita transportation energy consumption rates, thanks to its extensive public transportation network, particularly in New York City. The high use of public transit and dense urban layout result in significantly lower per capita emissions. Similar to New York, Rhode Island’s small size and relatively dense population help keep per capita transportation energy use low. The availability of public transit and shorter travel distances contribute to reduced per capita emissions.
Reasons for High and Low Per Capita Values
Climate: States with extreme climates (very hot or cold) often have higher per capita residential energy consumption due to the need for heating or cooling. States with milder climates, like California, tend to have lower per capita consumption.
Population Density: Higher population density typically leads to lower per capita energy consumption, as urban areas often have more efficient energy use in residential and transportation sectors. Dense populations also support public transportation, reducing per capita transportation energy use.
Economic Structure: States with energy-intensive industries, like those involved in oil refining or mining, often have higher per capita industrial energy consumption. In contrast, states with service-based economies tend to have lower per capita energy use.
Infrastructure and Urban Planning: States with extensive public transportation systems, like New York, have lower per capita transportation energy consumption. Conversely, rural states with limited public transit options, like Wyoming and Montana, have higher per capita consumption due to reliance on personal vehicles.
Energy Sources: States that rely on coal or natural gas for energy tend to have higher per capita carbon emissions, while those with significant renewable energy production, like Vermont, have lower emissions.
Q & A?
Jay Ha
Head of Urban Research
Doctoral student in Urban Planning at USC
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