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Trump’s Energy Price Hike: Families Could Pay $120 More For Electricity Annually If GOP Pulls the Plug on Clean Energy

Press Contact: Seth Nelson

Today, a new analysis from Energy Innovation revealed that residential electricity prices would jump 6.7% in 2026 if Republicans charge ahead with their reckless, unpopular plan to pull the plug on the Inflation Reduction Act’s clean energy investments. That’s the equivalent of a $120 national electricity tax per household—just from eliminating the tech-neutral §45Y production tax credit and the §48E investment tax credit. In some states, household energy bills would rise by over $500 annually. And by 2040, American households would face $140–$220 higher energy bills each year if Congress repeals the tech-neutral tax credits.

Donald Trump promised to cut energy costs in half, but he’s already taken a series of executive actions that are driving prices higher. Now, his Republican allies in Congress are crafting a reconciliation package that could wipe out the IRA’s clean energy investments altogether to fund their $4.5 trillion tax giveaway to billionaires and big corporations. And it would trigger Trump’s biggest energy price hike yet—sticking American families with the bill.

ICYMI: Energy Innovation: Federal Clean Energy Tax Credits Make Energy More Affordable–A Meta-Analysis

Dan O'Brien and Jack Conness
April 1, 2025

  • This summary compares analyses from more than a dozen nonpartisan research groups, showing how repealing §45Y and §48E technology-neutral electricity tax credits would raise the nations household energy bills to around $6 billion annually in the next five years and $25 billion annually by 2040. In some states, households would shoulder over $500 increases in their annual energy bills.

  • United States electricity demand is expected to grow, in part because data center demand could more than double by 2030. Utilities need to build power plants quickly to meet increased demand. This comes at a time when paying for electricity is an increasingly large burden for American families and businesses – costs increased 22 percent from 2018 to 2023, and could rise another 7 percent this year. To meet growing demand, utilities are largely turning to renewables as the fastest, most affordable way to bring more power online.

  • Longstanding tax credits, extended by Congress in 2022, reduce the cost of meeting growing electricity demand and provide utilities with important incentives to diversify American energy. Two specific credits – the §45Y and §48E technology-neutral tax credits for clean electricity production – are protecting consumers by getting new renewables onto the grid quickly at reduced cost. Unfortunately, Congress is now considering repealing these credits – this would force higher prices on households and businesses already dealing with electricity price increases.

  • Federal clean energy tax credits have already lowered electricity prices. NERA Economic Consulting examined the impacts of the §45Y and §48E technology-neutral tax credits and found that U.S. residential electricity prices would be 6.7 percent higher in 2026 and 7.3 percent higher in 2029 in the absence of these tax credits (equivalent to adding a $120 national tax on household electricity next year). Consumers in some states would be stung by particularly strong cost increases. Without the credits, households would see their 2026 electricity bills increase by 21 percent in Wyoming, 17 percent in Washington, D.C., 17 percent in New Mexico, 15 percent in Washington, and 14 percent in North Carolina.

  • Other analyses show similar impacts from §45Y and §48E repeal. Energy Innovation finds §45Y and §48E repeal would increase annual household energy bills by up to $640 in Missouri, $520 in Arkansas, $480 in Kansas, $460 in Iowa, $460 in Rhode Island, and $400 in Texas. Aurora Energy Research finds annual energy bill increases of up to $490 in New York, $420 in Texas, $410 in Minnesota, $260 in Arkansas, and $260 in Louisiana. Brattle finds annual electricity bill increases of $152 in North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Iowa, and Missouri by 2035.

  • Inflation is hitting Americans hard, including on electricity bills. Federal energy tax credits are a bulwark against continued price increases. The research is clear – repealing technology-neutral energy tax credits would raise annual energy bills up to $140–$220 per year nationally, and over $500 per year in some states. Electric utilities know this – that's why they are saying publicly that Congress would force consumer costs higher by repealing these vital money-saving laws. As Congress debates the future of these tax credits, repealing them is not the smart path forward, as it would exacerbate inflation and cut into Americans’ pocketbooks.

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