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Yahoo
a day ago
- Business
- Yahoo
How Trump's Big Beautiful Bill will raise household energy costs
Energy policy analysts are in broad agreement about one consequence of major legislation that Republicans are currently pushing through Congress: It will raise energy prices for the average American household by hundreds of dollars, once all is said and done. That's because the legislation, which President Donald Trump has dubbed the Big Beautiful Bill, will repeal the vast majority of clean energy provisions contained in the Inflation Reduction Act, or IRA, which a Democrat-controlled Congress passed in 2022. That earlier law provided a wide array of financial incentives for the deployment of electricity sources like solar, wind, battery storage, and nuclear power, as well as support for consumers looking to buy zero- and low-emissions products like electric vehicles. Choking off support for those measures not only hobbles U.S. efforts to fight climate change — the IRA, if left intact, could single-handedly reduce the country's carbon emissions by 40 percent — but it also means there are fewer new sources of energy for a country that has started to need more and more of it. And reduced supply coupled with increased demand means higher prices. That's the virtually unanimous conclusion of the academics and policy experts who have been trying to understand the likely effects of the rollback for the past few months, though each group of experts used different assumptions about the full extent of IRA repeal, given that the legislation is still currently being revised by the Senate. Part of the reason for this unanimity is that, once constructed, many newer energy sources like wind and solar don't have substantial operating costs, compared to traditional power plants that must be continuously supplied with fuel. 'Clean electricity has zero generation cost,' said Robbie Orvis, a senior director for modeling and analysis at Energy Innovation, a nonpartisan think tank. 'One of the dynamics is that less clean electricity gets built, and that makes power generation more expensive, because we're relying more frequently on fossil fuels with higher generation costs.' Orvis' group calculated that those higher power generation costs from using coal or natural gas, along with other price increases stemming from IRA repeal, would result in household energy costs rising by more than $33 billion annually by 2035, compared to a scenario in which the IRA were left intact. That works out to roughly $250 more per year per household. Other analysts came to similar conclusions: The Rhodium Group, an independent policy analysis firm, estimates that average household costs could be as much as $290 higher per year by the same date. Princeton University's ZERO Lab projects that energy costs could grow even higher: Their estimates show that, in a decade, annual household prices will be $270 to $415 higher under the GOP plan. Energy Innovation's analysis calculated the effects of repealing the IRA on energy bills and transportation costs across the nation. They found that, if the tax credits for clean energy are taken away, utilities will increasingly rely on natural gas and coal, which have higher generation costs. These costs would then be passed on to customers. Additionally, as electric utilities' demand for natural gas increases, the cost of the fossil fuel in the market will also rise, further raising household energy bills. 'Gas suppliers can't respond immediately to large changes in the demand for gas,' said Orvis. 'The change in gas demand is pretty large without the tax credits. So you're really increasing the reliance on gas, and therefore, gas demand and gas prices.' On the transportation front, the legislation passed by the House of Representatives eliminates IRA tax credits for electric vehicles and undoes the nation's latest tailpipe standards, which limit the amount of pollution that new vehicles are allowed to emit. The result is a greater reliance on gasoline than would happen under the status quo — and more demand for gasoline means higher prices at the pump, per Orvis' modeling. These price spikes — and the electricity spikes in particular — won't be felt uniformly across the nation. One key factor is how utilities in a state are regulated. Many states have just one utility that both generates power and provides it to electricity customers. But in so-called deregulated markets such as Texas and Pennsylvania, electricity providers compete on an open market to sell their power. The rules around how utilities calculate and pass on the costs of generating electricity vary significantly between these two models. In regulated markets with just one provider, the cost of generating electricity and getting it to homes is averaged out and passed on to customers. But the competitive nature of deregulated markets means that customers can see wild fluctuations in price. During peak winter and summer, when demand for power is high, prices can be double or triple normal rates. As a result, customers in deregulated markets see more variation in their bills — because those bills closely track changes in the marginal cost of electricity. If those costs rise in a dramatic and systematic way because IRA repeal leads to fewer sources of energy, customers in deregulated markets will feel the full force of it. Customers in regulated markets like much of the Southeast, on the other hand, will be somewhat cushioned from the increase, because their costs reflect the average of all generation and transmission costs incurred by their utility. 'That helps minimize the impact of repealing IRA tax credits — though it also runs the opposite way and helps reduce savings when market prices go down,' said Jesse Jenkins, an associate professor at Princeton University who led the modeling conducted by the ZERO Lab, in an email. These rising costs will come on top of U.S. energy bills that are already ticking upward. Electricity prices have been steadily rising since 2020, and the federal Energy Information Administration recently forecasted that that trend is likely to continue through 2026. Prices have increased for a variety of reasons, including Russia's invasion of Ukraine disrupting global oil and gas supply chains, extreme heat and other weather shocks, costly maintenance needed to protected the grid from wildfires, and the buildout of additional capacity to meet growing demand. U.S. electricity demand is beginning to rise for the first time in decades, thanks to the construction of new manufacturing facilities and data centers, which support operations like cloud computing and artificial intelligence, as well as the growing adoption of electric vehicles. Orvis said that the IRA has been helping meet that demand and maintain the country's competitive advantage with China, one of the Trump administration's stated goals. The so-called Big Beautiful Bill would undermine that progress by reducing the amount of energy available for new manufacturing and AI development — and making the electricity that's left more expensive for everyone. 'The ironic thing is that what's in the bill, the net results of it will be completely contradictory to what the [Trump] administration's stated policy priorities are and will cede a lot of the AI development and the manufacturing to China specifically,' said Orvis. 'That's the important macro context for everything that's happening now — and some of the un-modelable implications in the long run.' This story was originally published by Grist with the headline How Trump's Big Beautiful Bill will raise household energy costs on Jun 6, 2025.
Business Mayor
22-05-2025
- Business
- Business Mayor
Trump's tax bill to cost 830,000 jobs and drive up bills and pollution emissions, experts warn
A Republican push to dismantle clean energy incentives threatens to reverberate across the US by costing more than 830,000 jobs, raising energy bills for US households and threatening to unleash millions more tonnes of the planet-heating pollution that is causing the climate crisis, experts have warned. A major tax bill passed by the Republican-held House of Representatives on Thursday morning will, as currently written, demolish key components of climate legislation signed by Joe Biden that has spurred a record torrent of renewable energy and electric vehicle investment in the US. Under the reconciliation bill, tax credits for cleaner cars will end this year, with incentives for wind, solar and even nuclear energy projects scaled down and then eliminated by 2032. Clean energy manufacturing tax credits will be axed by 2031, while Americans seeking to upgrade their homes to cleaner or more energy efficient appliances will get no further subsidy after the end of this year. 'This bill is worse than what people envisioned – it pulls the rug out from facilities banking on these incentives, it raises everyday household costs by hundreds of dollars and undercuts any sort of action on climate change,' said Robbie Orvis, senior director at Energy Innovation, a non-partisan climate policy thinktank. The American Refining Group oil refinery in Bradford, Pennsylvania. Photograph: Jim West/Universal'You can't overstate how significant this will be in weakening the US's position. With inflation, tariffs and rising electricity use, it really couldn't come at a worse time. It's a really damaging bill.' Since the passage of the 2022 Inflation Reduction Act, more than $320bn has flowed mostly to Republican-held districts in the form of new clean energy development and electric car construction. A further $522bn in investment is in the pipeline but is now menaced by the Republican bill's removal of tax incentives. 'You're talking about half a trillion dollars of investment at risk from these changes,' said Orvis. 'Over 10 years, we found that these changes would reduce US GDP by over $1tn.' The legislation also follows months of attacks on green spending from the Trump administration, including the end of energy efficiency programs and climate-focused grantmaking and loans. A stacked bar chart showing how the proposed reconciliation bill is expected to increase energy bills 'If you take all of that together, all of these pieces have the same effect: it's going to increase prices on everybody,' one former senior Department of Energy official said. Republicans wrangled over how far to slash the IRA's tax bill as it stands will cause Americans' energy bills to spike by stymying new renewable energy – often the cheapest form of new electricity generation – the non-partisan thinktank Energy Innovation calculated. The average household will see their bills rise by more than $230 by 2035. This comes on top of the cost of tariffs imposed by Donald Trump, who has attempted to aggressively push the US to 'drill, baby, drill' for more oil and gas at the expense of solar and wind, which he has called 'ugly' and 'disgusting' and barred from federal lands and waters. 'This will all come at the expense of the environment,' said Orvis. The new bill will also cause the US to emit 260m tonnes more pollution than it would've otherwise in 2035, which is more than the entire annual emissions of Spain. While emissions would still decline overall, the US is cutting pollution far too slowly to avert the worst impacts from the heatwaves, floods, drought and other disasters fueled by global heating. Read More G20 panel to suggest ways to enhance MDB lending: NK Singh A line chart showing how the reconciliation bill could undermine efforts to reduce greenhouse gas emissions (GHG) And the legislation will cost the US 830,000 jobs by 2030 compared with the status quo, Energy Innovation found. That includes the direct loss of jobs in fields such as solar panel manufacturing and electric vehicle production, indirect job loss from the decreased investments and lower clean energy demand, and induced cuts resulting from consumer spending cuts attributable to layoffs, higher fuel costs, and other third-order effects. 'The Inflation Reduction Act was carefully crafted to create good-paying jobs in deindustrialized communities, underserved communities, and coal communities. We have seen that it is doing just that, creating good jobs you don't need a college degree to get and opening up pathways to the middle class across the nation,' said Ted Fertik, vice-president of manufacturing and industrial policy at climate and labor advocacy group Blue Green Alliance. 'Killing the tax credits in the Inflation Reduction Act is a direct attack on working Americans.' Other experts have also warned about the devastating consequences of the legislation. By 2028, the reconciliation bill would kill approximately 300,000 jobs in the solar and energy storage sectors, found an analysis from the industry group Solar Energy Industries Association (SEIA) released on Monday. Line chart showing how the proposed reconciliation bill would slash hundreds of thousands of domestic jobs Organized labor is increasingly speaking out against the megabill. This week, the president of the North America's Building Trades Unions said: 'Job cuts for blue-collar Americans should not foot the bill for billionaire tax cuts.' And last week, the president of an electrical worker union in Washington state wrote an op-ed defending the IRA. Warring blocs in the GOP fought for months over the fate of the IRA's green incentives. While some moderate, IRA-defending Republicans floated reconciliation language aimed at preserving its green credits, a handful of hardliners demanded an even quicker phaseout of clean energy programs. The latter faction has critiqued the IRA on the grounds that it is anti-populist, with Oklahoma congressperson Josh Brecheen deeming it 'nothing more than a massive, taxpayer-funded gift to green energy lobbyists and their leftist billionaire employers' and Texas congressperson Chip Roy critiquing calling it the 'green new scam'. But the rich are expected to benefit most from the reconciliation bill's tax cuts, while the rollback of IRA credits is expected to raise household costs and slash employment – particularly in red districts, which have enjoyed the vast majority of investment spurred by the IRA. Employees work on the R1S model electric vehicles on the pilot production line at Rivian's headquarters in Irvine, California, on 5 July 2023. Photograph: Bloomberg/Getty Images The Republican legislation, which will act as an effective repeal of the climate bill, is compounded by the actions of the Trump administration, which has set about eviscerating rules limiting pollution from cars, trucks and power plants and sought to halt other efforts to tackle the climate crisis. The combined impact of all these actions is set to exact a greater toll than the bill itself, resulting in as much as 730m tonnes of extra pollution over the next decade, a separate study by Rhodium, another energy research group, has found. 'This is just about as bad as it gets,' said Ben King, associate director at Rhodium. 'If you're a solar or wind developer, there's no reason you'd choose the US rather than China after this. The proposals are cutting off the nose to spite the face, it's unclear what the policy objectives are other than they don't like the policies.
The Guardian
22-05-2025
- Business
- The Guardian
Trump's tax bill to cost 830,000 jobs and drive up bills and pollution emissions, experts warn
A Republican push to dismantle clean energy incentives threatens to reverberate across the US by costing more than 830,000 jobs, raising energy bills for US households and threatening to unleash millions more tonnes of the planet-heating pollution that is causing the climate crisis, experts have warned. A major tax bill moving through the Republican-held House of Representatives will, as currently written, demolish key components of climate legislation signed by Joe Biden that has spurred a record torrent of renewable energy and electric vehicle investment in the US. Under the reconciliation bill, tax credits for cleaner cars will end this year, with incentives for wind, solar and even nuclear energy projects scaled down and then eliminated by 2032. Clean energy manufacturing tax credits will be axed by 2031, while Americans seeking to upgrade their homes to cleaner or more energy efficient appliances will get no further subsidy after the end of this year. 'This bill is worse than what people envisioned – it pulls the rug out from facilities banking on these incentives, it raises everyday household costs by hundreds of dollars and undercuts any sort of action on climate change,' said Robbie Orvis, senior director at Energy Innovation, a non-partisan climate policy thinktank. 'You can't overstate how significant this will be in weakening the US's position. With inflation, tariffs and rising electricity use, it really couldn't come at a worse time. It's a really damaging bill.' Since the passage of the 2022 Inflation Reduction Act, more than $320bn has flowed mostly to Republican-held districts in the form of new clean energy development and electric car construction. A further $522bn in investment is in the pipeline but is now menaced by the Republican bill's removal of tax incentives. 'You're talking about half a trillion dollars of investment at risk from these changes,' said Orvis. 'Over 10 years, we found that these changes would reduce US GDP by over $1tn.' The legislation also follows months of attacks on green spending from the Trump administration, including the end of energy efficiency programs and climate-focused grantmaking and loans. 'If you take all of that together, all of these pieces have the same effect: it's going to increase prices on everybody,' one former senior Department of Energy official said. Republicans are currently wrangling over how far to slash the IRA's tax credits, but the bill as it stands, as passed by the House's ways and means committee, would cause Americans' energy bills to spike by stymying new renewable energy – often the cheapest form of new electricity generation – the non-partisan thinktank Energy Innovation calculated. The average household would see their bills rise by more than $230 by 2035. This comes on top of the cost of tariffs imposed by Donald Trump, who has attempted to aggressively push the US to 'drill, baby, drill' for more oil and gas at the expense of solar and wind, which he has called 'ugly' and 'disgusting' and barred from federal lands and waters. 'This will all come at the expense of the environment,' said Orvis. The new bill will also cause the US to emit 260m tonnes more pollution than it would've otherwise in 2035, which is more than the entire annual emissions of Spain. While emissions would still decline overall, the US is cutting pollution far too slowly to avert the worst impacts from the heatwaves, floods, drought and other disasters fueled by global heating. And the legislation will as written cost the US 830,000 jobs by 2030 compared with the status quo, Energy Innovation found. That includes the direct loss of jobs in fields such as solar panel manufacturing and electric vehicle production, indirect job loss from the decreased investments and lower clean energy demand, and induced cuts resulting from consumer spending cuts attributable to layoffs, higher fuel costs, and other third-order effects. 'The Inflation Reduction Act was carefully crafted to create good-paying jobs in deindustrialized communities, underserved communities, and coal communities. We have seen that it is doing just that, creating good jobs you don't need a college degree to get and opening up pathways to the middle class across the nation,' said Ted Fertik, vice-president of manufacturing and industrial policy at climate and labor advocacy group Blue Green Alliance. 'Killing the tax credits in the Inflation Reduction Act is a direct attack on working Americans.' Other experts have also warned about the devastating consequences of the legislation. By 2028, the reconciliation bill would kill approximately 300,000 jobs in the solar and energy storage sectors, found an analysis from the industry group Solar Energy Industries Association (SEIA) released on Monday. Organized labor is increasingly speaking out against the megabill. This week, the president of the North America's Building Trades Unions said: 'Job cuts for blue-collar Americans should not foot the bill for billionaire tax cuts.' And last week, the president of an electrical worker union in Washington state wrote an op-ed defending the IRA. Warring blocs in the GOP have fought for months over the fate of the IRA's green incentives. While some moderate, IRA-defending Republicans floated reconciliation language aimed at preserving its green credits, a handful of hardliners are demanding an even quicker phaseout of clean energy programs. The latter faction has critiqued the IRA on the grounds that it is anti-populist, with Oklahoma congressperson Josh Brecheen deeming it 'nothing more than a massive, taxpayer-funded gift to green energy lobbyists and their leftist billionaire employers' and Texas congressperson Chip Roy critiquing calling it the 'green new scam'. But the rich are expected to benefit most from the reconciliation bill's tax cuts, while the rollback of IRA credits is expected to raise household costs and slash employment – particularly in red districts, which have enjoyed the vast majority of investment spurred by the IRA. The Republican legislation, which would act as an effective repeal of the climate bill, is compounded by the actions of the Trump administration, which has set about eviscerating rules limiting pollution from cars, trucks and power plants and sought to halt other efforts to tackle the climate crisis. The combined impact of all these actions is set to exact a greater toll than the bill itself, resulting in as much as 730m tonnes of extra pollution over the next decade, a separate study by Rhodium, another energy research group, has found. 'This is just about as bad as it gets,' said Ben King, associate director at Rhodium. 'If you're a solar or wind developer, there's no reason you'd choose the US rather than China after this. The proposals are cutting off the nose to spite the face, it's unclear what the policy objectives are other than they don't like the policies. Michael Saintao contributed reporting
CNN
21-05-2025
- Business
- CNN
The jobs and tax credits that could disappear if the ‘big, beautiful' House GOP bill passes
Green energy Sustainability Taxes Congressional newsFacebookTweetLink Follow House Republicans are proposing to gut energy savings and clean energy tax credits in President Donald Trump's 'big, beautiful' tax bill — funds that are creating thousands of jobs in GOP states and saving homeowners money on their bills. It's all on the chopping block. The House GOP is moving closer to a final vote on Trump's tax package, before it heads to the Senate. If Congress passes the tax bill as it stands, it could cost the US more than 830,000 jobs that would otherwise be created in the coming years, the think tank Energy Innovation found. The impacted jobs are mostly in construction and manufacturing, building factories and components for EVs, wind turbines, solar panels, batteries and other clean energy products — the vast majority of which are in GOP states and districts. It also threatens an eye-popping amount of investment from companies that piggybacked on the passage of the 2022 clean energy bill, also known as the Inflation Reduction Act. 'We're talking about an awful lot of money — approaching a trillion dollars in private sector investment that's either been made or has been planned — that is at risk,' said Robbie Orvis, Energy Innovation's senior director of modeling and analysis. The threatened funds are in the same places the jobs are at risk; nearly 80% of the investment sparked by the law is in Republican areas, according to data from the Rhodium Group and the Massachusetts Institute of Technology. Bottom line, that's what the new tax bill is, essentially: a repeal of the clean energy provisions in the 2022 Inflation Reduction Act, according to independent analysis from the two nonpartisan think tanks. 'It's functionally equivalent to a full-out repeal,' Orvis said, adding the current bill proposed by House Republicans is a 'sledgehammer on steroids.' It would hurt Republicans the most. Republicans represent 14 of the top 20 congressional districts that are on the cusp of gaining the most jobs from the law, which was championed by former President Joe Biden. Tennessee, Georgia and the Carolinas, among others, have gained most of the new jobs in electric vehicle and battery manufacturing and could stand to lose the most if tax credits disappear. Rep. Mark Amodei, whose Nevada district alone is poised to gain more than 20,000 jobs in mining, refining and processing lithium for EVs and batteries, previously told CNN that continuing to fund these facilities in his district is 'fundamental.' Orvis said the Republican tax bill could not only hurt future projects, it will likely hurt existing manufacturing facilities as well. 'Some of the proposed language in the (bill) text actually puts existing facilities at risk because they will no longer qualify to receive some of the tax credits that they got financing on,' Orvis said. The cost of electricity for everyday Americans and businesses would also go up; Energy Innovation found wholesale electricity prices would increase by 50% by 2035. This is in large part because solar and wind energy are cheaper than fossil fuels. Rhodium's analysis found the GOP bill would slash the amount of new clean energy on the US electric grid by 57-72% through 2035. Cutting cheaper wind and solar will raise American's energy bills, analysts said. 'You don't worry about (price volatility) with wind and solar; the sun is still free,' Rhodium analyst Ben King told CNN. 'By shifting away from renewables and back to natural gas, you are exposing yourself to price volatility as well.' Some Republican lawmakers have voiced concerns that repealing the tax credits could hurt electricity generation at a time when the US needs more power than ever. The AI boom is gobbling up electricity for data centers, and companies are on the hunt for electrons wherever they can find them. That's the central argument solar CEOs have been making to Republican lawmakers as they've pleaded with them to keep the credits intact. 'Solar is the most effective form of energy going forward; it's the fastest and cheapest to market,' said Zaid Ashai, CEO of solar company Nexamp. 'The reality is we're in this economic competition with China. The only way to win the technology and AI race is to be energy independent, and solar is a really key component of that.'
CNN
21-05-2025
- Business
- CNN
The jobs and tax credits that could disappear if the ‘big, beautiful' House GOP bill passes
Green energy Sustainability Taxes Congressional newsFacebookTweetLink Follow House Republicans are proposing to gut energy savings and clean energy tax credits in President Donald Trump's 'big, beautiful' tax bill — funds that are creating thousands of jobs in GOP states and saving homeowners money on their bills. It's all on the chopping block. The House GOP is moving closer to a final vote on Trump's tax package, before it heads to the Senate. If Congress passes the tax bill as it stands, it could cost the US more than 830,000 jobs that would otherwise be created in the coming years, the think tank Energy Innovation found. The impacted jobs are mostly in construction and manufacturing, building factories and components for EVs, wind turbines, solar panels, batteries and other clean energy products — the vast majority of which are in GOP states and districts. It also threatens an eye-popping amount of investment from companies that piggybacked on the passage of the 2022 clean energy bill, also known as the Inflation Reduction Act. 'We're talking about an awful lot of money — approaching a trillion dollars in private sector investment that's either been made or has been planned — that is at risk,' said Robbie Orvis, Energy Innovation's senior director of modeling and analysis. The threatened funds are in the same places the jobs are at risk; nearly 80% of the investment sparked by the law is in Republican areas, according to data from the Rhodium Group and the Massachusetts Institute of Technology. Bottom line, that's what the new tax bill is, essentially: a repeal of the clean energy provisions in the 2022 Inflation Reduction Act, according to independent analysis from the two nonpartisan think tanks. 'It's functionally equivalent to a full-out repeal,' Orvis said, adding the current bill proposed by House Republicans is a 'sledgehammer on steroids.' It would hurt Republicans the most. Republicans represent 14 of the top 20 congressional districts that are on the cusp of gaining the most jobs from the law, which was championed by former President Joe Biden. Tennessee, Georgia and the Carolinas, among others, have gained most of the new jobs in electric vehicle and battery manufacturing and could stand to lose the most if tax credits disappear. Rep. Mark Amodei, whose Nevada district alone is poised to gain more than 20,000 jobs in mining, refining and processing lithium for EVs and batteries, previously told CNN that continuing to fund these facilities in his district is 'fundamental.' Orvis said the Republican tax bill could not only hurt future projects, it will likely hurt existing manufacturing facilities as well. 'Some of the proposed language in the (bill) text actually puts existing facilities at risk because they will no longer qualify to receive some of the tax credits that they got financing on,' Orvis said. The cost of electricity for everyday Americans and businesses would also go up; Energy Innovation found wholesale electricity prices would increase by 50% by 2035. This is in large part because solar and wind energy are cheaper than fossil fuels. Rhodium's analysis found the GOP bill would slash the amount of new clean energy on the US electric grid by 57-72% through 2035. Cutting cheaper wind and solar will raise American's energy bills, analysts said. 'You don't worry about (price volatility) with wind and solar; the sun is still free,' Rhodium analyst Ben King told CNN. 'By shifting away from renewables and back to natural gas, you are exposing yourself to price volatility as well.' Some Republican lawmakers have voiced concerns that repealing the tax credits could hurt electricity generation at a time when the US needs more power than ever. The AI boom is gobbling up electricity for data centers, and companies are on the hunt for electrons wherever they can find them. That's the central argument solar CEOs have been making to Republican lawmakers as they've pleaded with them to keep the credits intact. 'Solar is the most effective form of energy going forward; it's the fastest and cheapest to market,' said Zaid Ashai, CEO of solar company Nexamp. 'The reality is we're in this economic competition with China. The only way to win the technology and AI race is to be energy independent, and solar is a really key component of that.'
