Retail residential electricity prices in the United States have mostly risen over the last decades. In 2023, prices registered a year-over-year growth of 6.3 percent, the highest growth registered since the beginning of the century. Residential prices are projected to continue to grow by two percent in 2024. 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.

The retail price for electricity in the United States stood at an average of ***** U.S. dollar cents per kilowatt-hour in 2024. This is the highest figure reported in the indicated period. Nevertheless, the U.S. still has one of the lowest electricity prices worldwide. As a major producer of primary energy, energy prices are lower than in countries that are more reliant on imports or impose higher taxes. Regional variations and sector disparities The impact of rising electricity costs across U.S. states is not uniform. Hawaii stands out with the highest household electricity price, reaching a staggering ***** U.S. cents per kilowatt-hour in September 2024. This stark contrast is primarily due to Hawaii's heavy reliance on imported oil for power generation. On the other hand, states like Utah benefit from lower rates, with prices around **** U.S. cents per kilowatt-hour. Regarding U.S. prices by sector, residential customers have borne the brunt of price increases, paying an average of ***** U.S. cents per kilowatt-hour in 2023, significantly more than commercial and industrial sectors. Factors driving price increases Several factors contribute to the upward trend in electricity prices. The integration of renewable energy sources, investments in smart grid technologies, and rising peak demand all play a role. Additionally, the global energy crisis of 2022 and natural disasters affecting power infrastructure have put pressure on the electric utility industry. The close connection between U.S. electricity prices and natural gas markets also influences rates, as domestic prices are affected by higher-paying international markets. Looking ahead, projections suggest a continued increase in electricity prices, with residential rates expected to grow by *** percent in 2024, driven by factors such as increased demand and the ongoing effects of climate change.

The U.S. Energy Information Administration complies this calendar-year data to show a comparison for residential rates. Source: Form EIA-861 2016 Data.

Global electricity prices for households averaged some ** U.S. cents per kilowatt hour as of 2016. Europe and North America had the highest average prices, while households in sub-Saharan Africa paid the least for electricity. Germany has one of the highest electricity prices in the world at about ** U.S. cents per kilowatt hour; in comparison, the price of electricity in the United States averaged 13 U.S. cents per kilowatt hour. As Germany transitions from fossil fuels to renewable sources through the country’s Renewable Electricity Energy Sources Act (EEG or Erneuerbare-Energien-Gesetz), electricity prices have increased via taxes and levies on commercial and residential consumers. Prices are very different across the world and can also vary within municipalities in many countries.

Determining electricity rates Electricity prices (also called electricity tariffs) depend on a variety of factors such as price of primary power generation sources, government taxes, and grid infrastructure. A large portion of electricity prices are based on wholesale electricity costs. Tariffs will also differ based on customer groups, usually categorized by residential, commercial, and industrial customers. For example, prices for industrial customers tend to be very close to the wholesale price of electricity as they tend to consume more power at higher voltages which is more efficient, and thus, cheaper. Customers tend to be differentiated by load size and usage profiles – how much the customer contributes to the peak load is also important in determining rate class.

United States EIA Forecast: Electricity Price: Retail: Residential Sector data was reported at 13.027 0.01 USD/kWh in Dec 2019. This records a decrease from the previous number of 13.488 0.01 USD/kWh for Nov 2019. United States EIA Forecast: Electricity Price: Retail: Residential Sector data is updated monthly, averaging 13.050 0.01 USD/kWh from Mar 2016 (Median) to Dec 2019, with 46 observations. The data reached an all-time high of 13.716 0.01 USD/kWh in Sep 2019 and a record low of 12.002 0.01 USD/kWh in Jan 2017. United States EIA Forecast: Electricity Price: Retail: Residential Sector data remains active status in CEIC and is reported by Energy Information Administration. The data is categorized under Global Database’s USA – Table US.P003: Energy Price: Forecast: Energy Information Administration.

In 2024, the retail price of electricity for residential customers in the United States averaged 16.48 U.S. cents per kilowatt-hour. Households are charged more than the commercial and industrial sectors, because of the higher distribution costs. Since 2020, electricity customers have seen electricity prices increase in the U.S. and peak in 2024. The U.S. electricity market The U.S. electricity market is led by several types of electricity providers, such as cooperatives, municipal systems, and shareholder-owned electric utilities. In 2022, cooperatives were the most common type of ownership in the U.S., with more than 600 providers. That year, the U.S. electric utility industry revenue amounted to 488 billion U.S. dollars. Electricity prices around the world Electricity prices vary widely from country to country, depending on energy sources used, as well as government and industry subsidies and regulations. In 2023, Ireland and the United Kingdom had some of the highest household electricity prices worldwide. Meanwhile, U.S. households paid some of the lowest prices. However, leading oil and gas-producing regions such as the Middle East registered the cheapest rates overall.

As of 2023, the average end-user tariff for electricity customers in Ghana reached **** Ghanaian cedis (GHS) (around **** U.S. dollars) per kilowatt hour. In the preceding year, it stood at ** Ghanaian pesewas, following the upward trend observed since 2010. That year, ** Ghanaian pesewas (roughly ***** U.S. dollars) were paid for every kilowatt hour of electricity consumed, on average.