Across the United States, the cost of keeping the lights on is rising from two directions at once.
Utilities in nearly every state are raising rates just as federal clean energy tax credits—one of the few tools that helped families lower their long-term bills—are set to expire at the end of 2025. The result is a two-front affordability squeeze that threatens to deepen energy insecurity for tens of millions of Americans. In 2025 alone, utilities in forty-nine states have proposed or enacted rate increases, collectively adding roughly $29 billion to customer bills.
For many households, that means an extra $35 to $60 each month—an amount that can tip already tight budgets in a year when grocery, rent, and health costs remain high.
Behind the hikes are forces largely beyond any one utility’s control: a rebound in natural gas prices, the cost of replacing aging grid infrastructure, and record electricity demand driven by the rapid buildout of AI data centers, electric vehicles, and onshored manufacturing. These are foundational costs of modernization, but they flow through state regulatory processes and land squarely on household ledgers.
The squeeze is compounded by what’s happening at the federal level. At the end of 2025, key clean energy tax credits from the Inflation Reduction Act will disappear under the One Big Beautiful Bill Act. The 30% Residential Clean Energy Credit, which helps homeowners install rooftop solar panels and battery storage, will end alongside the Energy Efficient Home Improvement Credit that offsets the cost of heat pumps, insulation, and windows.
For years, these credits gave families a way to make one-time investments that reduced their monthly bills for decades. Their expiration removes one of the most effective tools consumers have to manage rising energy costs. Without those incentives, the economic logic of home efficiency weakens, and the broader grid feels the ripple.
Analysts project that without continued incentives for new wind and solar capacity, the U.S. will remain more dependent on volatile fossil fuels like natural gas, keeping wholesale and retail electricity prices higher for everyone. Modeling suggests that repealing the credits could add $40 to $60 a year to average household energy costs by 2030—and potentially far more in regions that rely heavily on new clean energy capacity to meet demand. Developers warn that the rollback will also slow deployment of low-fuel-cost resources and battery storage, leaving the grid less resilient to price spikes and extreme weather events.
Together, these trends form a feedback loop that works against consumers. Immediate rate hikes bring financial strain now, while the rollback of federal incentives removes the best available options for long-term relief.
As households pay more for power, they lose the ability to invest in the very technologies that could help them use less. Policy shifts at both the state and federal level are nudging the energy mix back toward fossil fuels, whose price volatility helped trigger the current round of increases in the first place.
Analysts estimate that the combined effect of higher rates and expiring tax credits could cost the average household hundreds of dollars more each year over the next decade, widening the gap between those who can afford to invest in efficiency upgrades before the deadline and those who cannot.
For lower-income families already spending a disproportionate share of their income on utilities, the compounding pressures threaten to entrench energy insecurity, forcing difficult choices between electricity, food, and medicine.
If affordability becomes the breaking point, policymakers may soon find that the biggest threat to a modern, decarbonized grid isn’t technology—it’s the household budget.
