‘Big Beautiful Bill’ Implications for Renewable Energy

TL/DR –

The One Big Beautiful Bill Act, which seeks to cut funding for energy programs, could result in substantial economic costs, according to a report by nonpartisan think tank Energy Innovation. The proposed legislation could slow energy development and production and lead to the loss of 330 gigawatts of new electricity generation capacity by 2035, impacting both red and blue states significantly. Additionally, the bill could threaten over $321 billion in private investments in energy and manufacturing, cause hundreds of thousands of job losses annually, and increase household energy costs.

Impact of Energy Program Cuts in the “Big Beautiful Bill”

The cost-cutting “big beautiful bill” that narrowly passed the House in May could be costly for states, according to analysts at Energy Innovation. The bill proposes the removal of unallocated clean energy funds, elimination of clean energy tax credits, and new fees for electric and hybrid vehicle owners.

These changes could lead to a 330 gigawatt loss in new electricity generation capacity by 2035 — the equivalent of 165 new Hoover dams. Wind power would be the most affected, particularly in red states such as Texas which leads in wind energy production.

The cut in energy capacity is problematic, as AI is projected to increase data center power demand by 160% by 2030 according to Goldman Sachs. Over $321 billion of announced private investments in energy and manufacturing are threatened by the removal of clean energy tax credits.

The report author Megan Mahajan says, “All the major gas turbine manufacturers have delivery backlogs until at least 2029. If you’re thinking about meeting rising electricity demand with new sources, getting wind and solar online is crucial.”

Job losses could occur in the hundreds of thousands each year by removing incentives for clean energy investment, with notably affected states being Texas, Florida, North Carolina, Ohio and Indiana.

As the cheapest sources of electricity, wind and solar play a crucial role in household energy costs. Greater reliance on fossil fuels and increased demand could cause energy bills to rise, primarily in Republican-led states.

According to the Energy Innovation’s modeling, factors such as rising household costs, cancelled investments and projects, and job losses could lead to a cumulative GDP loss over a trillion dollars over the next 10 years.

China’s exports of advanced energy technology are 10 times greater than the U.S. and grew over 100% between 2018 and 2023. “In a world where competitors like China are all in on clean energy, we don’t want to lose the momentum we’ve seen on this front,” Mahajan adds.

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