Will the ‘Big Beautiful Bill’ Raise Your Energy Costs?

If passed, President Donald Trump's "One Big Beautiful Bill" could significantly impact the nation's immigration, health care, education, energy and more.

While some Americans might benefit from the budget reconciliation bill, others could feel a financial pinch if commodities such as energy become more expensive, as some experts predict.

We'll cover why the bill might impact energy prices, how much you could pay to keep the lights on and what you can do to reduce this monthly expense.

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Why energy costs could go up under the proposed bill

The proposed bill would repeal Biden-era tax credits incentivizing taxpayers to make their homes and businesses more energy efficient. With the tax breaks gone, alternative energy generation equipment such as solar panels and wind turbines could become more expensive.

Power plants might then become more reliant on natural gas to generate electricity, causing natural gas prices to inflate. Electric companies would likely pass the increase in costs on to consumers.

Currently, more than 40% of the country's electricity comes from natural gas, so there's a good chance your light bill will go up if the cost of natural gas rises as projected with the passage of this bill.

As it is, the U.S. Energy Information Administration (EIA) predicts that natural gas prices will increase this year due to overseas gas sales and other factors.

The Trump administration argues that gas prices could drop with fewer barriers to pipeline construction and drilling.

It also maintains that the rapid expansion of alternative energy could strain the power grid, particularly because renewable sources such as solar and wind are intermittent and could require significant infrastructure upgrades to ensure reliability.

How much more you might pay for electricity

Resources for the Future forecasts that repealing these tax credits could ultimately increase costs by $400 more per year for the average family. Your bill increase, if any, could be a different amount, depending on where you live.

The potential hike would further compound the financial pain of other recent energy price increases. According to the EIA, energy costs are up by double digits since 2022 as power plants struggle to keep up with escalating demand.

The recent surge in artificial intelligence (AI) technology adoption has resulted in the building of many AI data centers, which require a lot of electricity to run.

How to prepare your budget for higher utility bills

A $400 annual energy cost increase means your monthly bill would be roughly $33 higher. You can probably find the extra money in your budget by cutting a discretionary purchase or two.

You could also use the interest earned from a high-yield savings account (HYSA) to offset the increase. For example, if you deposit roughly $9,000 into an HYSA with a 4.5% annual percentage yield (APY), you'll earn approximately $400 in interest within 12 months.

In addition, you could pay your electric bill with a cash-back credit card featuring a high reward rate for utility spending. The cash back you earn would offset part of the price increase, provided you pay your credit card bill in full and on time.

For instance, the U.S. Bank Cash+® Visa Signature® Card currently gives you up to 5% cash back on your top two spending categories each quarter — including utility purchases. If you spend $600 per quarter on electricity, you would earn $30 back, roughly one month's worth of the price increase.

Use the tool below to explore some of today's best HYSA rates, powered by Bankrate:

Energy-efficient upgrades that still qualify for 2025 tax credits

The two energy tax credits for home improvements that Trump's bill would eliminate are the Clean Energy Property Credit and the Energy Efficient Home Improvement Credit. Here's how they compare:

Swipe to scroll horizontally

Row 0 - Cell 0	Clean Energy Property Credit	Energy Efficient Home Improvement Credit
Qualifying Improvements	Solar panels, solar-powered water heaters, geothermal heat pumps, wind turbines, fuel cells	Insulation, boilers, central air conditioning systems, water heaters, heat pumps, exterior doors and windows
Credit Amount	30% of the cost with no cap* (*Except fuel cells, which are limited to $500 per half kilowatt of power capacity)	30% of the cost up to $1,200 per tax year (Many improvement types also have their own cap)
Carryover Provision?	Yes	No

While these tax breaks are on the chopping block, you can still get them for the 2025 tax year, regardless of whether the proposed energy and budget legislation passes.

If you want to lower your tax bill and have a more energy-efficient home or business, you should make the desired improvements by December 31, 2025.

Smart ways to lower your energy bill

According to the EIA, roughly three out of 10 Americans had issues paying for the energy they needed in 2020. Continued price hikes could increase the number of consumers who struggle to cover this expense.

Rising energy costs can be especially concerning for retirees and those on fixed incomes. With fewer support programs guaranteed in the future, it’s more important than ever to plan and find ways to manage utility expenses proactively.

Fortunately, there are several things you can do to cut your energy bill, including, but not limited to:

Shopping around for a better rate (if you have access to more than one service provider).
Using appliances and tech gadgets at off-peak times to pay less per kilowatt hour.
Installing a smart thermostat to control your home's temperature from your phone.
Maintaining your heating and cooling system to ensure it operates efficiently.
Closing drapes in the summer and opening them in the winter to block or harness the sun's power.
Sealing your windows and exterior doors to keep heat or air conditioning from escaping your home.
Buying energy-efficient appliances when you're due for a replacement or an upgrade to use less electricity while running.
Using cold water to use less energy while doing laundry.
Lowering the temperature on your water heater to use less energy while showering or running the dishwasher.

Want personalized guidance? Consider getting a home energy audit to learn your property's greatest areas of opportunity and how to address them.

Laura has been a freelance writer since 2018. Her work primarily focuses on managing your money, navigating your career, and running a successful business. Her words have been featured in Yahoo Finance, US News & World Report, and many other publications. She earned her MBA and a Bachelor's in Psychology during her previous career in human resources.