Energy Prices: Expected Impacts of the One Big Beautiful Bill
The One Big Beautiful Bill Act is the signature legislative achievement of President Donald J. Trump’s second term.
Passed into law on July 4th, the One Big Beautiful Bill (OBBB) is a sweeping legislative package that includes:
Sweeping tax code reform
Significant cuts to social safety net programs
Increased funding for the Department of Homeland Security and the Department of Defense
The elimination or restriction of multiple renewable power incentives, like the Residential Clean Energy Credit, EV Tax Credit, and the Clean Electricity Investment Tax Credit (ITC)
New incentives for domestic production/transmission of fossil fuels for use in electricity generation
Electricity generation at a utility scale from clean, renewable energy sources has grown by approximately 8–10% since the passage of the Inflation Reduction Act in 2022.
In 2022, U.S. renewables generated about 913 billion kWh (nearly 23% of total generation).
By 2024, annual output was projected to exceed ~945–1,000 billion kWh, a ~9 percent increase in just two years.
This continued rise has pushed renewables’ share of U.S. electricity from about 22% in 2022 to roughly 24–25% by 2024
Now that the IRA’s clean energy incentives have been largely eliminated or phased out, how is the OBBB likely to impact the retail price of electricity for American consumers and businesses?
Residential Electricity Rates Are Going Up
Retail electricity prices in cents per kilowatt-hour (¢/kWh) are increasing significantly faster than the general rate of inflation.
The latest EIA Electricity Monthly Update (May 2025) shows residential retail prices
have increased about 6.5% for residential customers as of May 2025 (year-over-year).
It’s too early to see the effects of the One Big Beautiful Bill on electricity prices, but it’s not difficult to predict.
Incentivizing increased burning of fossil fuels to generate electricity and gutting clean energy credits is bound to lead to higher energy prices over the long term, not to mention the negative impact on the environment.
Additional utility-scale wind and solar farm capacity will continue to come online as credits are phased out, but eliminating the 30% Investment Tax Credit and signalling that the current administration does not support renewable electricity generation is already having a chilling effect on investment in solar, wind, and battery storage projects.
Under the OBBB, clean energy credits are phased out or eliminated on the following schedule.
The One Big Beautiful Bill’s Impact on Renewable Energy Incentives
Tax Credit (Code) | Description | OBBB Phase-Out/Elimination |
Energy Efficient Home Improvement Credit (25C) | Credit for home upgrades that improve energy efficiency (insulation, windows, HVAC, etc.) | Ends after 2025: No credit for property placed in service after Dec. 31, 2025 |
Residential Clean Energy Credit (25D) | 30% credit for residential renewable energy installations (solar, home battery storage, geothermal) | Ends after 2025: No credit for expenditures made after Dec. 31, 2025 |
Previously-Owned Clean Vehicle Credit (25E) | Credit (up to $4,000) for buyers of used electric vehicles (EVs) | Ends after Q3 2025: No credit for vehicles acquired after Sept. 30, 2025 |
Clean Vehicle Credit – New EVs (30D) | Credit (up to $7,500) for purchasers of new qualifying EVs | Ends after Q3 2025: No credit for EVs acquired after Sept. 30, 2025 |
Alternative Fuel Refueling Property Credit (30C) | 30% credit for installing EV charging stations or other alternative fueling infrastructure | Ends mid-2026: No credit for property placed in service after June 30, 2026 |
New Energy Efficient Home Credit (45L) | Tax credit for builders of new energy-efficient homes | Ends mid-2026: No credit for qualifying homes acquired after June 30, 2026 |
Commercial Clean Vehicle Credit (45W) | Credit for businesses purchasing qualifying electric or fuel-cell vehicles | Ends after Q3 2025: No credit for vehicles acquired after Sept. 30, 2025 |
Energy Efficient Commercial Buildings Deduction (179D) | Deduction for energy-efficient construction or retrofit of commercial buildings | Ends mid-2026: No deduction for projects beginning after June 30, 2026 |
Clean Electricity Production Tax Credit (45Y) | Technology-neutral PTC for clean electricity generation | Wind/solar must be in service by Dec. 31, 2027 (unless construction begins by July 4, 2026). Other eligible generation: full credit through 2033, 75% in 2034, 50% in 2035, 0% after 2035 |
Clean Electricity Investment Tax Credit (48E) | Technology-neutral ITC for clean power generation and storage | No credit for solar/wind facilities after 2027 (unless construction begins by July 4, 2026). Other tech: 30% credit through 2033, 22.5% in 2034, 15% in 2035, 0% after 2035 |
Advanced Manufacturing Production Credit (45X) | Credit for domestic manufacturing of clean energy components and critical minerals | Wind components end 2027; others phase out: 25% reduction in 2030, 50% in 2031, 75% in 2032, 0% after 2032 |
Clean Hydrogen Production Credit (45V) | Incentive for production of low-carbon clean hydrogen | Ends after 2027: No credit for facilities beginning construction after Dec. 31, 2027 |
Clean Fuel Production Credit (45Z) | Per-gallon credit for domestic production of low-carbon fuels (including SAF) | Extended through 2029 but reduced value: max SAF credit cut from $1.75 to $1.00/gal; from 2026 only U.S./Canada/Mexico feedstocks qualify |
Zero-Emission Nuclear Power Production Credit (45U) | PTC for electricity from existing nuclear plants | Full credit through 2028; then 80% in 2029, 60% in 2030, 40% in 2031, 0% after 2031 |
How Much Will Electricity Prices Go Up?
There’s no way of knowing exactly how much retail electricity costs will increase in the coming years.
In addition to the effects of the One Big Beautiful bill, many other forces can drive retail electricity prices down or up, including:
Fuel costs (natural gas, coal, oil)
Renewable energy deployment levels
Transmission and distribution infrastructure costs
Power plant construction and maintenance costs
Weather and seasonal demand fluctuations
Regulatory and policy changes
Regional supply and demand balance
Wholesale electricity market conditions
Rising electricity demand from AI and data centers
Inflation and interest rates
Geopolitical conditions and events
(Source: Energy Information Administration)
Historically, retail electricity costs have correlated with the rate of inflation, and indeed, household electricity bills are one of the goods tracked in the Consumer Price Index basket.
However, increased residential electricity costs began to outpace the rate of inflation in the early 2020s, and the EIA expects this trend to continue for the foreseeable future.
By 2026, electricity prices are expected to be 13% - 18% higher, while the general inflation rate is expected to grow by 11% - 14%.
(Source: Statista)
How Much Will Electricity Bills Go Up In My State?
Household electricity has long been the most expensive sector in cost per kilowatt-hour (¢/kWh).
Electricity rates vary widely from state to state and by utility provider.
For example, in June 2025, the state with the highest rate for residential electricity in the US was Hawaii at an average of 40.96 ¢/kWh.
The cheapest rate was in Idaho at 12.07 ¢/kWh — a price difference of 239%.
The billing method you or your power company chooses can also have a significant impact on how much you pay for electricity.
If your utility offers dynamic pricing, you’ll pay a higher Time-of-Use rate during peak demand hours and less during off-peak hours.
Whole-home backup power owners can save significantly on power bills by limiting or eliminating electricity consumption during on-peak demand hours.
Widespread disparity in residential electricity rates by region is nothing new in the US, but some of the states that already pay higher than average rates are about to see prices go up even more due to new fees and other factors.
Regions expected to see the highest near-term increases include:
New England, Middle Atlantic, and Pacific regions
Texas (ERCOT)
Mid-Atlantic (PJM)
Virginia (particularly under Dominion Energy)
Upstate New York (National Grid / NYSEG territory)
California and the broader Northeast
Wyoming (if subsidies are rolled back significantly)
New Infrastructure Fees and Capacity Charges
Utilities and power companies nationwide are struggling to meet growing electricity demand caused by skyrocketing AI and data center growth, more frequent and severe heat waves, and numerous other factors.
Even if the electricity price in cents per kilowatt-hour hasn’t increased significantly, many consumers are getting energy bills that are higher than ever, even if they’re using the same amount of power — or even less.
One example of how new or increased “capacity charges” are driving up electricity bills primarily impacts about 4 million ComEd customers in Northern Illinois.
Starting in June 2025, Commonwealth Edison customers saw their electricity bills increase by about 10%, regardless of current consumption.
A statement from ComEd claimed, “While we can’t control this price increase, we want to support you in any way that we can.”
Electricity Supply vs. Electricity Delivery Charges
CoMed operates under a corporate structure that’s common among electricity providers in the US.
ComEd is a subsidiary of Exelon, a publicly traded for-profit company, but it operates as a regulated monopoly for electricity delivery in Northern Illinois.
What that means in practice is that ComEd cannot set the rates for electricity supply in ¢/kWh.
Electricity rates and allowed profits are set and regulated by the Illinois Commerce Commission (ICC).
ComEd does not profit on electricity generation costs — by law, it must pass wholesale supply costs directly to customers without markup.
Instead, ComEd earns profit almost exclusively from delivery charges, since the ICC sets delivery rates that allow the utility to recover grid costs and earn a regulated return on its investments.
Investor-Owned Utilities (IOUs) with similar structures to ComEd include some of the biggest electricity suppliers in the US, such as:
Con Edison (Consolidated Edison, Inc.) – New York City & Westchester County, NY
Pacific Gas & Electric (PG&E Corporation) – Northern California
Southern California Edison (Edison International) – Southern California
Florida Power & Light (NextEra Energy) – Most of Florida
Georgia Power (Southern Company) – Most of Georgia
Duke Energy – Large service territories in North Carolina, South Carolina, Florida, Ohio, Indiana, Kentucky
Xcel Energy – Operates regulated utilities in Minnesota, Colorado, Wisconsin, and other states
Dominion Energy – Virginia, parts of North Carolina, and South Carolina
American Electric Power (AEP) – Ohio, Texas, West Virginia, Oklahoma, and others
PSEG (Public Service Electric & Gas) – New Jersey
The primary reason that consumers in many states are seeing their electricity bills skyrocket despite the rate in cents per kilowatt-hour rising more slowly is due to increased delivery charges, which are set by regulators to allow utilities to recover grid costs and earn a regulated return.
Unfortunately, that means that the increased costs of generating electricity from burning fossil fuels like natural gas and coal — instead of continuing to expand the renewable energy supply — have yet to be priced into retail costs per kilowatt-hour.
It’s as demand continues to increase with little to no new solar or wind turbine farms coming online that the true impact of the One Big Beautiful Bill Act on energy prices will fully hit consumers where it hurts - their wallets.
Futureproof Yourself Against Rising Electricity Bills
The best way to shield yourself against rising electricity supply and delivery costs is by reducing your dependence on the utility grid.
With electricity demand projected to skyrocket and the proportion of supply from renewable energy sources expected to shrink, rates are almost certain to increase substantially, at least over the next five years.
Even if utility-scale solar and wind projects start being incentivized again by the federal government, power plants take years, sometimes a decade, to go online by connecting to the grid.
Fortunately, the most generous solar and home battery tax credit ever made available to American homeowners is still available until December 31st, 2025.
The Residential Clean Energy Credit allows US taxpayers to deduct 30% of the total purchase and installation of eligible solar panels and home battery systems at their primary or secondary residences against their personal income tax liability.
If the credit exceeds your income tax liability in 2025, you can roll the balance over to deduct in subsequent years.
You can even finance an eligible system over time by buying direct from a manufacturer like EcoFlow — as long as the system is installed and a financing contract is in place before January 1st, 2026.
Eligible whole home generator solutions like EcoFlow DELTA Pro Ultra can significantly reduce or eliminate your dependence on the power grid and your electricity bills.
Not only that, it can keep your home up and running during extended power outages.
EcoFlow makes a wide variety of portable off-grid solar and battery solutions.
Check out our selection today.