Trump’s Energy Plan May Cost Families $120 More Annually
TL/DR –
A new analysis from Energy Innovation indicates that residential electricity prices would rise by 6.7% in 2026 if the Republican plan to eliminate clean energy investments under the Inflation Reduction Act proceeds. This would equate to a $120 national electricity tax per household and could result in annual energy bills rising by over $500 for some states. The increase is due to the potential elimination of the tech-neutral §45Y production tax credit and the §48E investment tax credit, and could see households paying $140-$220 more for energy by 2040 if repealed.
Residential Electricity Prices To Surge By 6.7% In 2026: A New Analysis
A new analysis from Energy Innovation predicts a 6.7% hike in residential electricity prices by 2026, equivalent to a $120 national electricity tax per household. This increase would result from eliminating the §45Y production tax credit and the §48E investment tax credit under the Inflation Reduction Act’s clean energy investments. By 2040, American households could face $140–$220 higher energy bills annually.
Trump’s Energy Policies Could Trigger Price Hike
Despite promises to slash energy costs, Donald Trump has executed several actions inflating prices. His Republican allies might further escalate costs by potentially removing the IRA’s clean energy investments to finance a $4.5 trillion tax windfall for billionaires and large corporations.
Impact Of Repealing Electricity Tax Credits On Household Energy Bills
Analyses from numerous nonpartisan research groups demonstrate that repealing the §45Y and §48E tech-neutral electricity tax credits could elevate household energy bills to approximately $6 billion annually within five years and $25 billion annually by 2040. As U.S. electricity demand rises, utilities must accelerate power plant construction to meet the surging demand, significantly burdening American households with increasing energy costs.
The Role Of Federal Clean Energy Tax Credits
The §45Y and §48E technology-neutral tax credits for clean electricity production, extended by Congress in 2022, help lower the cost of meeting the growing electricity demand. These credits also incentivize utilities to diversify American energy. However, the potential congressional repeal of these credits could impose higher electricity costs on households and businesses.
Effects Of Repealing §45Y and §48E Technology-Neutral Tax Credits
NERA Economic Consulting’s study reveals that without the §45Y and §48E technology-neutral tax credits, U.S. residential electricity prices could rise by 6.7% in 2026 and 7.3% in 2029. Some states would experience particularly sharp cost increases.
Inflation And Electricity Bills
With inflation already impacting Americans, federal energy tax credits serve as a buffer against further price hikes. 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.
###
—
Read More US Economic News