ENERGY costs are already on the rise as demand outpaces supply, and the passage of a major policy switch may exacerbate the price increases.
Following the passing of Trump’s legislative package in July, all households in a key US state are expected to shell out an extra $130 on electricity each year.
Electricity prices are rising due to heightened demand[/caption]
Energy bills may spike even more in the wake of a major policy change[/caption]
On July 4, President Donald Trump signed the One Big, Beautiful Bill Act, a reconciliation bill aimed at addressing both taxation and spending to align with our country’s budget goals.
The bill laid out hundreds of provisions, implementing significant switch-ups regarding federal taxes, credits, and deductions.
The comprehensive law package rolled back billions of dollars worth of Biden-era tax credits for the renewable energy industry and for Americans making energy-efficient upgrades to their homes.
Renewable energy developers have warned that the tax credit changes will lead to higher costs for Americans, according to Spotlight PA.
Over in Pennsylvania, residents are expected to dish out more cash on energy soon, especially as the increasing number of data centers in the state increases demand for power.
A tax credit for building clean energy projects and a tax credit for generating power with low emissions – two of the biggest tax credits – are now at risk due to the One Big, Beautiful Bill.
They will expire by the end of 2027 rather than nearly 10 years later.
Renewable energy projects are expected to slow down as a result, reducing the amount of power that Pennsylvania generates, according to experts.
Consumers may soon see a boost in their electricity bills, with one report predicting that Pennsylvania households will have to pay an extra $130 per year by 2030.
INDUSTRY SHAKE-UP
Reversing the tax credits is just one step the current administration has taken to crack down on the clean energy industry.
The president recently ordered the secretary of the Treasury to issue guidance on the tax credit rollback process, with clean energy developers worrying that this will make it more difficult to claim the credits before their expiration.
At the moment, renewable energy developers can claim credits for existing projects that start construction prior to the end of 2026 or projects that begin operating prior to the end of 2027.
While developers have positive views on the long-term growth of the renewable energy industry, many have admitted that hiked upfront construction costs in the near term will push away business, according to Spotlight PA.
The repeal of the tax credits is “less than ideal for clean energy companies,” Aaron Nichols, a research and policy expert at solar panel installation company Exact Solar, told the outlet.
Low-cost tips to stay cool this summer
Here are some tips to help you keep cool this hot season and save money on energy costs:
- Close the curtains during daylight hours
- Change the filters on your AC unit and ensure it is operating as efficiently as possible
- Run the blades of your fan counterclockwise to push the cold air downward
- Avoid using appliances like your oven, dishwasher, or dryer, which emit heat when in use
- Wear loose-fitting, lightweight clothes indoors
- Sleep with sheets instead of heavy blankets
- Drink lots of water and use ice to lower your body temperature
Source: AARP
Business has spiked since the One Big, Beautiful Bill Act was passed, driven by homeowners hurrying to claim a tax credit for residential installation prior to its expiration at the end of 2025.
“Homeowners who were kind of on the fence to invest in home solar are now doing it just as fast as they possibly can,” Nichols told Spotlight PA.
He projected that the solar industry would continue to grow regardless of the availability of tax credits because of the major rise in energy demand.
While the rescinding of the credits may slow business temporarily, the policy expert predicted that it would not stop the industry’s growth.
“I think there’s going to be a short period where a lack of incentives is going to matter,” he said of the tax credits. “And then I think we’re just going to keep going.”
Summer Protections by State
In 2025, just 17 states and Washington DC offer Americans protections from having their electricity shut off if they are behind on utility payments:
- Arizona
- Arkansas
- Colorado
- Delaware
- Washington DC
- Georgia
- Illinois
- Louisiana
- Maryland
- Minnesota
- Mississippi
- Missouri
- Nevada
- Oklahoma
- Oregon
- Texas
- Washington
- Wisconsin
Source: NEADA
A COSTLY CHANGE
Global electricity demand has nearly doubled over the last two decades and is projected to continue growing, with consumer electricity costs already on the rise as demand outpaces supply.
Eliminating the tax credits will contribute further complications to the industry at a time when Pennsylvania needs more energy, executive director of the Mid-Atlantic Renewable Energy Coalition Evan Vaughan told Spotlight PA.
He noted that the spike in costs for developers would be “baked in” to electricity prices for consumers for “several years to come.”
“It’s not a ‘sky is falling’ moment for wind and solar, but it does introduce new challenges and new uncertainty,” said Vaughn.
“We need certainty around building more energy if we’re going to win the AI race and if we’re going to keep prices reasonable for consumers.”
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Energy bills are expected to reach an average of $784 this summer[/caption]
