An October 7th report from WalletHub notes that the average American household spends over $2,200 annually on energy, and heating and cooling expenses represent almost half of those costs. Demographic research firm WalletHub decided to rank the states by energy efficiency to create their 2014 Most and Least Energy Efficient States ranking.

In order to rank the states by energy efficiency, WalletHub compared the 48 continental states based on the  dimensions of “home-related energy efficiency” and “car-related energy efficiency.” They calculated home-related energy efficiency by calculating the ratio between the total residential energy consumption and annual degree days. The calculation for car-related energy efficiency involved dividing the annual vehicle miles driven by the gallons of gasoline used. Then each dimension was weighted to reflect national consumption patterns.

WalletHub

The data used to create the WalletHub state energy efficiency rankings was provided by the U.S. Census Bureau, the National Climatic Data Center, the U.S. Energy Information Administration and the Federal Highway Administration.

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Most energy efficient states

According to the WalletHub 2014 Most and Least Energy Efficient States ranking, Vermont is the most energy efficient state in the union. Vermont is ranked 2nd in home-related energy efficiency and 4th in car-related energy efficiency. New York is the second most energy efficient state, with rankings of 6th in home-related energy efficiency and 6th in car-related energy efficiency. Wisconsin is third on the state energy efficiency list, with a rank of 8th in home-related energy efficiency and 11th in car-related energy efficiency.

Least energy efficient states

South Carolina is currently the least energy efficient state according to WalletHub’s list. The Palmetto State was ranked 48th overall, 47th in home-related energy efficiency and 43rd in car-related energy efficiency. Louisiana comes in at No. 47 overall on the state energy efficiency ranking. The Bayou State  was ranked 48th in home-related energy efficiency and 38th in car-related energy efficiency. Kentucky is ranked in 46th place on the list, at 43rd in home-related energy efficiency and 37th in car-related energy efficiency.

Importance of government energy efficiency initiatives

San Diego State Mechanical Engineering Professor Asfaw Beyene explains the importance of government initiatives in promoting energy efficiency. “Well-placed incentives are essential to lower upfront costs of products that are at a disadvantage compared to matured technologies that matured as a result of incentives. The most effective incentives are those that avoid at all cost benefiting intermediate dealers and contractors, and strictly deliver the incentives to the end-users.”