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The Trump administration has targeted the renewable energy industry for massive cutbacks in 2025’s One Big Beautiful Bill (OBBB). According to NPR, the bill, signed into law on July 4, eliminates tax incentives for solar and wind projects across the United States. As a result, electricity bills throughout the country are expected to increase, according to nonpartisan think tank Energy Innovation.
Here’s a look at exactly how and why power bills may be on the rise, with a specific look at the four states expected to suffer the most.
What’s in the New Legislation?
As with any large piece of legislation, there’s a bit of complexity attached to the elimination of wind and solar subsidies in the OBBB. Thanks to negotiation from some Republican senators, tax incentives will remain for companies that start construction on projects by July 4, 2026, and that place them in service by the end of 2027.
However, as Norton Rose Fulbright points out, even this provision has been muddied by proclamations from the Trump administration. An executive order issued by President Trump just three days after the legislation was signed directs the Treasury Department to issue “new and revised guidance” within 45 days “restricting the use of broad safe harbors [to treat projects as under construction] unless a substantial portion of a subject facility has been built.”
This confusion prompted Ryan Sweezey, director of North America power and renewables at energy research firm Wood Mackenzie, to say, “I would characterize this as a high degree of volatility expected over the next year. I mean, the policy situation is still not clear.”
For renewable energy companies, this means they are being prompted to rush new projects while at the same time being uncertain if they will actually receive the tax incentives they seek. This type of stalemate puts renewables in a state of limbo for the time being, which isn’t good for business.
It seems unlikely that Trump will backpedal on his campaign against renewables, as he called wind and solar energy “a blight” on the country during a Cabinet meeting, according to NPR. “They hurt our country very badly,” he said. “And smart countries don’t use it.”
How Will the Legislation Affect Energy Prices?
The bottom line is that even a reduction in subsidies and incentives for the renewable energy market — let alone an elimination — will drive up energy prices across the country. According to NPR, energy demand is likely to increase significantly over the next few years, and renewable energy plants were being counted on to produce relatively cheap energy for new data centers and factories.
Energy Innovation predicts that national energy rates will increase for consumers by an average of 9% to 18% by 2035. On a wholesale basis, prices are expected to rise 25% by 2030 and a whopping 74% by 2035. Additionally, it will cost the U.S. economy thousands of jobs and billions of dollars in planned investment.
Which States Are Most Vulnerable, and Why?
The states hardest-hit by the new legislation may dream of a 10-year increase of “only” 9% to 18% in energy costs. This is because some states rely completely on the federal government for renewable energy development. According to Dan O’Brien, a senior analyst at Energy Innovation, the firm anticipates that costs will rise the most in these four states:
- Oklahoma
- Kentucky
- Missouri
- Kansas
In Oklahoma, rates are expected to skyrocket by between 60% and 350% by 2035. Kentucky, Missouri and Kansas are projected to see rate increases of at least 48%, 39% and 30% over the next decade, respectively.
When factoring in job losses in addition to energy price increases, Energy Innovation sees these five states as the biggest losers:
- South Carolina
- Florida
- Texas
- Kentucky
- North Carolina
All of these states in both lists are predominantly Republican-led, from a Congressional standpoint. Energy Innovation says that costs will rise the most in these “red” states because they have no state-led renewable programs. This means they will have to rely on more expensive forms of energy as wind and solar industries shrink and subsidies vanish.
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