Words by Ari Matusiak
Artwork by Romain Lenancker
The middle of the twenty-first century will be shaped by two significant trends in our energy system and economy: soaring energy demand and rapidly rising energy costs. The two are related, and how we address them will have a direct impact on American economic competitiveness, the nature of our politics, and, of course, the climate. The irony is that the answers currently being pursued by policymakers will not help us meet our near-term energy needs, undermine our global competitiveness, take years to come to fruition, and raise costs for ratepayers. But we actually have a solution hiding in plain sight: the American household. By positioning it at the center of our energy infrastructure, we can meet our energy needs and reduce costs in a way that benefits everyone.
Electricity demand in the U.S. is projected to surge by 128 gigawatts over the next five years—a 16% increase driven largely by AI data centers and advanced manufacturing. One thing is certain: We’re going to need a lot more power. And that fact is reviving antiquated ideas about how to get the energy, like re-opening coal plants, drilling in national parks, and building a plethora of new gas and nuclear plants.
Using old solutions for new problems isn’t just antiquated; it’s insufficient. Building new gas plants can take years due to equipment backlogs. Nuclear power will take even longer to come online. Expect the inevitable legal fights, delayed timelines, and cost overruns.
Building new power plants also costs money, the cost of which is typically borne by consumers through rate basing, which allows utilities to raise customer rates to pay for these projects. And that causes higher energy bills. That’s a really bad idea when energy costs for American families have already surged 30% since 2020. Add to the mix uncertainty about how AI will reshape our economic and social future, and you have the makings of political backlash and social unrest.
But that future is not inevitable. I believe there is a way to transform this entwined and negative spiral into a mutually beneficial bargain for everyday Americans, our economy, and our climate.
The first thing to grapple with is the explosive growth of AI. Estimates vary: On the high end, Goldman Sachs predicts AI could drive an almost $7 trillion increase in global GDP. Businesses are scrambling to join the race, and no one wants to get left behind. One technology company executive told me that there was no price they wouldn’t pay for the increased energy capacity that would enable their AI buildout. That’s how determined businesses are to move forward, no matter the cost.
“Hiding in plain sight, across America’s 132 million households, is an enormous untapped energy resource.”
Which brings me to the second thing: Americans are not powerless in the face of these changes. In fact, communities have a great deal of power, in more ways than one.
Hiding in plain sight, across America’s 132 million households, is an enormous untapped energy resource. Each inefficient appliance you swap out, solar panel and battery storage that you install, or smart device you program to modestly decrease power use during peak energy demand times all adds critically needed capacity to the electricity grid.
In fact, analysis from Rewiring America, the nonprofit where I serve as CEO, shows that upgrading homes in fast-growing states like Texas, Florida, and Arizona at scale could reduce residential electricity consumption by about half. And those megawatts can stay on the grid and be rerouted with significantly less time and effort than it takes to build a traditional power plant. That’s tremendously (and quantifiably) valuable to American firms angling to secure the energy they need right now to get their data centers online and stay competitive in the global AI race.
It’s a breakthrough idea: the household as critical energy infrastructure, one that can unleash energy back to the grid simply through electrification and efficiency upgrades. And this moment of unprecedented energy demand and a society being transformed by AI calls for a breakthrough approach.
Right now, households that want to make energy-saving upgrades cover the upfront cost themselves. Those with the resources can invest in the best equipment and save the most money—$2,000 a year on average, according to data modeled by Rewiring America. Meanwhile, a quarter of low-income households spend over 15% of their income on energy bills. Each household must fend for themselves and the wealth gap grows wider.
But what if we designed a new model? What if we treated these individual household actions as part of the broader social compact? We can restructure our energy system to create shared value by socializing the cost of this individual energy infrastructure.
Here’s how that innovative model could work: Companies that desperately need power can “purchase” this power by investing directly into households, helping cover the upfront cost of electrification and efficiency upgrades and making it possible for all families to access them. Companies get the extra electricity on the grid they need to power hundreds of data centers. Households get equipment that works better and saves them money, regardless of their economic situation. Everyone gets healthier air and a more reliable and affordable electricity grid.
And perhaps most importantly, we begin to tilt the balance of power in ways that could fundamentally reshape not just our energy system, but our economy and society.
“It’s a breakthrough idea: the household as critical energy infrastructure, one that can unleash energy back to the grid simply through electrification and efficiency upgrades.”
Call it the Robin Hood approach to the electricity grid. Instead of households financing the costs of new power plants through ever-rising electricity bills, paying for infrastructure that doesn’t directly benefit them, they become the focus of our energy future. Investments are directed toward the people who will help unlock our most critically underused energy asset: all of us.
Every hour of every day, about 500 new efficient electrically-powered machines are installed or put into use. But to meet climate goals, we must accelerate to 100% electric sales by 2050 much more quickly. We won’t meet that pace without major changes that allow everyone to electrify their homes.
Those major changes very well could be afoot: Political and economic leaders consider AI a national imperative. Households hold the key to powering it. For once, everyday Americans should have some real leverage to harness investments to make widespread household electrification possible. But the physical buildout of the AI surge is already happening, and there’s a limited window to act.
I see two paths ahead.
The first is the one we’re on: We spend so much time fighting against the inevitability of AI that we don’t have a say in what that future looks like. We let companies build out an energy system on people’s backs, fomenting even more social division as working people pay more for dirtier energy. Dollars flow to fossil fuel projects that take years to build and don’t accrete any benefit to households in this lifetime. Politicians gut incentives for actual solutions. And we entrench that fundamental feeling that’s manifested itself in our politics: so many Americans no longer feel like the beneficiaries of the nation’s social arrangement.
Or we can step off that path and center the American household as both the hero and beneficiary of our energy and economic story, rather than the victim. In doing so, we strengthen the American social compact and approach the biggest challenges of our time—climate change, the affordability crisis, and a broken energy system—at scale and in alignment with our energy, economic, and political imperatives. It will enable our country to fulfill our potential as an economic and technological leader that takes care of its citizens at the same time. That’s the kind of shared power we should all get behind.
This story first appeared in Atmos Volume 12: Pollinate with the headline “The Robin Hood Approach to the Electricity Grid.”
Join our membership community. Support our work, receive a complimentary subscription to Atmos Magazine, and more.
The Robin Hood Approach to the Electrical Grid
