How the Big, Ugly Bill Harms the Renewable Energy and Clean Vehicles Sectors

The 2025 budget bill, signed into law by President Trump on July 4, will affect our energy bills. The Big, Ugly Bill (BUB) will increase energy bills for the average household by $78 to $192 per month. That represents a two to four percent increase. 

Much of this increase (half to two-thirds) will be driven by higher spending on mobility fuels for electric vehicle (EV) charging. The rest will come from a two to four percent increase in electricity rates in 2035. BUB will also increase total industrial energy expenditures by $7 to $11 billion in 2035, a three to four percent increase. Higher electricity rates and more consumption of natural gas will drive the increases. 

BUB’s Effects On Energy & Transportation 

BUB will reduce new renewable energy generating capacity by 53 to 59 percent from 2025 through 2035. It phases out renewable energy tax credits by making it harder to obtain them. It requires wind and solar energy projects to come online by the end of 2027 to get the tax credits. 

By the end of 2032, the tax credits will be phased out. The budget bill cuts out credits for hydrogen by the end of 2027. The bill also repeals the climate and energy grant funding and the Loan Program Office credit subsidies enacted with the Inflation Reduction Act.

“The legislation restricts energy production, raises prices for American businesses and families, and challenges the reliability of our existing electric grid,” said American Clean Power Association CEO Jason Grumet.

BUB also affects the transportation sector. More than half a trillion dollars of renewable energy and transportation investment risk cancellation because of the budget bill. Over the next six to 12 months, tax credits for clean vehicles and efficient home appliances will end. It removes the penalty for not complying with the Corporate Average Fuel Standards, which effectively dismantles it. Electric vehicle tax credits will end, resulting in 27 to 41 million fewer light-duty EVs in 2035, a 20 to 34 percent reduction. 

As a result of the changes to the renewable energy and transportation sectors, emissions are expected to increase by 2035. 

The U.S. Needs Renewable Energy

Innovation and economic growth require increased electricity, and renewable energy plays a crucial role in expanding electricity capacity. The electricity demand in the U.S. will increase by 35 to 50 percent by 2040. The current data center sector needs more than 100 gigawatts (GW) of new power. Utility-scale renewable energy capacity exceeds 320 GW across the country. That is enough to power almost 80 million houses. Wind and solar account for around 16 percent of all U.S. electricity. 

The renewable energy sector invested $80 billion last year to deploy 49 GW, or 93 percent of the electricity capacity that came online. Around 95 percent of energy projects that connect to the grid are renewable energy projects. Those projects bring jobs. Renewable energy provides 1.4 million jobs. The sector contributes $18 billion to the country’s GDP annually. 

BUB’s passage means the renewable energy sector will produce less energy. That will result in fewer jobs and lower contributions to the GDP. The economy and consumers will suffer as a result. 

Donald Trump’s mindless antipathy toward renewable energy sources will cede leadership to the inevitable and globally expanding energy transition.

Does making America great again mean causing another great depression?