A woman works from home in September 2020 during the Covid-19 pandemic. | Robin Utrecht/SOPA Images/LightRocket via Getty Images
At least heading back to the office means cheaper electric bills.
There are plenty of reasons why you might dread heading back to the office, but your home electricity bill isn’t one of them.
Americans — many of whom worked remotely this past year rather than in their offices — have shouldered larger electricity expenses than usual as they stayed home, charged their computers and phones, and kept the lights on. Their offices, in turn, saved money on electricity.
In the three quarters last year after the US Covid-19 epidemic became widespread, residential electric usage rose by about 7.5 percent compared with the same period the previous year, according to an analysis of Energy Information Administration electricity sales data by Tufts University economics professor Steve Cicala. Commercial electricity consumption, meanwhile, declined by 7 percent in that time.
That works out to roughly $75 more on average in electric bills per customer over the three quarters, but that figure disguises big jumps in certain places like Connecticut and California, where many office workers worked from home and where bills increased $240, on average, according to Cicala.
Using monthly pricing data for electricity and adjusting for weather patterns, that works out to about $10.4 billion more in residential electric spending, in Q2-Q4 2020. Commercial spending, which includes offices but also establishments such as restaurants and hotels, declined nearly $7 billion in that same time. In addition to individual homes being less efficient than shared offices for electricity consumption, residential electricity rates are higher than commercial rates.
Cicala’s previous research found that residential energy usage had risen by as much as 10 percent from April to July 2020 — energy usage is at its highest during the summer. That usage moderated a bit as the year went on. Still, Cicala said, “a 7.5 percent increase is just completely jumping off the charts of normal year-to-year charges.” Indeed, before the pandemic, residential energy usage had been declining about 1 percent per year, thanks to more efficient appliances and lights, among other improvements.
Increased electric bills mean many Americans were having to shell out more money during a precarious economic time. Of course, that could be balanced out by less money spent on commuting to and from work, depending on your situation.
What’s more, after the 2017 tax overhaul under former President Donald Trump, employees can no longer claim federal tax deductions for their home offices, even as their employers — whose offices have sat empty — can. While not available for federal taxes, several states offer their own tax breaks for employee expenses. Some employers also reimburse work-from-home costs, and some states require them to do so.
“Simply put, in general, if you’re an employee working from home, you can’t deduct unreimbursed employee expenses (including the use of a home office),” Susan Allen, senior manager for tax practice and ethics at the American Institute of CPAs, told Recode.
And there are also other issues at play than electricity. Staying at home and not commuting helped contribute to a rare decline in greenhouse gas emissions during the pandemic and saved Americans many hours in transit. (But working from home has meant longer workdays and more meetings, as well, so perhaps it’s a wash.) Either way, this trend may not last much longer, since many Americans will be heading back to the office this summer or fall.