# Energy in buildings: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/energy/e_buildings/correlation/ The proxy is the average US city electricity price, regulated and smoothed. It follows power plant fuel costs, mostly gas, plus rising grid and network charges. In India, subsidised tariffs, LPG and rooftop solar shape household energy costs instead. Proxy **US city average electricity price** US$/kWh · monthly, Jan 2006 to Sep 2026 There is no free public price for energy in buildings itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item. #### What its price moves with Selected link ##### Energy in buildings and Natural gas Monthly changes -0.05 little or none correlation 12-month changes 0.35 weak correlation Last 5 years -0.00 monthly changes Lead or lag −2 mo Energy in buildings tends to lead by 2 months (r 0.13) Price function, Jan 2006 to Sep 2026 Energy in buildings ≈ 0.115 × (Natural gas)^0.09 R² 0.12 On this fit, a 10% higher natural gas price goes with a 0.8% higher energy in buildings price over the long run. Units: US$/kWh and $/mmbtu. The fit is loose, so treat the function as a rough guide. Chart: Energy in buildings and Natural gas prices rebased to 100 at Jan 2006, log scale Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size. Chart: Energy in buildings price against Natural gas price, monthly, log scales, with fitted line Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic. Energy [Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)Fuel cost −0.05 Gas is the main fuel for US power plants and home heating, so gas prices feed into tariffs with a lag. Yearly moves correlate at 0.35 with European gas, weak because American gas prices and regulated tariffs follow their own path. little or none co-movement month to month · 248 months Show charts Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/)Same utility prices 0.73 Commercial and household tariffs are set by the same utilities from the same generation and grid costs. Monthly moves correlate at 0.73 and yearly at 0.89, showing a shared cost base rather than any trade between the two. strong co-movement month to month · 248 months Show charts Energy [HI Energy-intensive industry](https://www.materialinsights.org/energy/e_heavy_industry/)Same utility prices 0.63 Industrial tariffs share fuel costs with household ones but carry fewer network charges, so they swing more with gas. Monthly moves correlate at 0.63, a moderate common driver from US power generation costs. moderate co-movement month to month · 248 months Show charts Energy [HP Heat pumps, air conditioning and refrigeration](https://www.materialinsights.org/energy/e_heat_pumps/)Electric heating demand 0.14 Heat pumps and air conditioners are a large part of household power use, and their spread raises peak demand and grid investment. Yearly moves correlate at 0.70 with the equipment index, largely a shared US inflation trend. little or none co-movement month to month · 248 months Show charts Energy [Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/)Grid cost 0.14 Poles, wires, switchgear and substations make up a growing share of household bills. The switchgear proxy correlates at 0.78 yearly with the electricity price, consistent with grid spending being passed through to tariffs. little or none co-movement month to month · 248 months Show charts Energy [Tc Thermal coal](https://www.materialinsights.org/energy/thermal_coal/)Power plant fuel 0.09 Coal remains the largest source of electricity in India and China and a declining one in the US. Yearly moves correlate at 0.32 with the US city price, weak because US tariffs depend mainly on gas and network costs. little or none co-movement month to month · 248 months Show charts How to read these numbers **Correlation of monthly changes** (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak. **12-month changes** compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs. **Price function** is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)^β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation. **Lead or lag** checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months. Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link. Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site. ## Other sections - [Summary](https://www.materialinsights.org/energy/e_buildings/index.md) - [Overview](https://www.materialinsights.org/energy/e_buildings/overview/index.md) - [Science and limits](https://www.materialinsights.org/energy/e_buildings/science/index.md) - [Value chain](https://www.materialinsights.org/energy/e_buildings/valuechain/index.md) - [Unit economics](https://www.materialinsights.org/energy/e_buildings/economics/index.md) - [Engineering methods](https://www.materialinsights.org/energy/e_buildings/methods/index.md) - [Equipment and suppliers](https://www.materialinsights.org/energy/e_buildings/equipment/index.md) - [Relationships](https://www.materialinsights.org/energy/e_buildings/links/index.md)