Households consume a large amount of indirect energy through the consumption of goods and services. This fact makes the quantitative analysis of indirect household energy consumption the foundation of energy policy design. This paper improves the compilation method of energy input-output tables, and establishes a sequence of energy input-output tables for China. Based on these tables, the indirect energy consumption of both rural and urban households is calculated. Then, with economic data for the year of 2005, the adjusted input-output price model is applied to evaluate how the alternative energy policies impact production prices, consumption prices, and real income of rural and urban households through the mechanism of indirect energy consumption by using electricity as an example. This research has practical implications for Chinese economy. The integration of energy-efficiency improvements and energy prices increase serves as a means to achieve both economic and energy conservation goals, and may also have a positive effect on residents' real income and a minimal effect on production prices. (C) 2009 Elsevier Ltd. All rights reserved.