This study examines a broader application of capability thinking in energy justice research, especially in the assessment of energy poverty relief policies. We review two emerging topics in energy research—energy justice and the capability approach—and connect them at the conceptual level. We then use both Sen’s and Nussbaum’s versions of capability theory to define three categories of ‘energy capabilities’ related to (a) biological and physical needs, (b) intellectual and emotional needs, and (c) social and political needs. The two primary evaluation criteria, compensation-based and empowerment-focused policy strategies, are distinguished using capability language. We apply this assessment framework to the case of U.S. energy poverty programs to examine whether current policy interventions address energy poverty in a systemic manner. Based on a review of the LIHEAP and WAP programs, we find that compensation measures have been at the centre of U.S. policy strategies for energy poverty alleviation. While financial aid can help at-risk households meet their urgent energy needs, bill assistance cannot be a long-term solution to the frequency and intensity of energy affordability challenges. Without solving the root cause of energy poverty, families may remain reliant on short-term financial assistance. Empowerment measures, in contrast, can create lasting improvement in all three categories of energy capabilities. We call for placing more emphasis on implementing energy-saving measures and developing community-based energy options for at-risk households.