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Congress moved one step closer to passing President Donald Trump’s “One Big, Beautiful Bill” this week — and with that, one step closer to spiking power bills across the nation.
The bill would rapidly phase out tax credits for clean energy, slowing the construction of solar, wind, and battery projects, which made up over 90% of new electricity connected to the grid last year.
Repealing those tax credits would come at a steep cost to utility customers in every state, according to NERA analysis commissioned by the Clean Energy Buyers Association. The most impacted states could see electricity prices rise by nearly 30% by 2029.
The Senate bill passed Tuesday would require solar and wind projects to either start construction within a year of the bill’s passage or start service by the end of 2027 to receive the tax credits. Those that begin construction after this calendar year would be subject to “foreign entity of concern” restrictions so difficult to comply with that experts have said they amount to a “backdoor repeal.” Batteries, nuclear, and geothermal have a longer runway to claim the credits but would have to deal with the same unworkable foreign-entity strictures.
The bill is now being considered by House Republicans, who have set a self-imposed deadline of sending the bill to Trump’s desk by Friday. A previous version of the bill passed the House in May by just one vote.
Clean energy is the cheapest and easiest way to get power onto the grid. With demand for electricity nationwide rising due in large part to AI data centers, swiftly bringing affordable energy online is more crucial than ever.
But if tax incentives are repealed, fewer solar, wind, and storage projects will be built. Between now and 2035, the U.S. could see 57% to 72% less new clean-energy capacity come online than it would have with the tax credits in place, according to Rhodium Group. Meanwhile, new gas construction likely can’t make up the difference in the near term: Developers who want to build new gas power plants face wait times of up to five to seven years for turbines.
Rising power demand plus slower power-plant construction is a recipe for higher electricity bills.
Households and businesses in Wyoming, Illinois, and New Mexico would see the biggest jump in energy costs should the tax credits be repealed. Nationwide, electricity prices would increase by an average of 7.3% for households and 10.6% for businesses, worsening the increasingly steep energy costs Americans face.
The biggest loss, however, would be for attempts to decarbonize the U.S. power system. The Inflation Reduction Act, the U.S.’s first real stab at climate policy, had put the country nearly on track to cut carbon emissions in line with global climate commitments. Under this bill, however, U.S. efforts to move away from fossil fuels are certain to be slowed — even as the rest of the world speeds ahead toward clean power.
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