‘Big Beautiful Bill’ will have Americans paying higher prices for dirtier energy

When congressional Republicans decided to cut some Biden-era energy subsidies to help fund their One Big Beautiful Bill Act, they could have pruned wasteful subsidies while sparing the rest. Instead, they did the reverse. Americans will pay the price with higher costs for dirtier energy.

The nearly 900-page bill that President Donald Trump signed on July 4, 2025, slashes incentives for wind and solar energy, batteries, electric cars and home efficiency while expanding subsidies for fossil fuels and biofuels. That will leave Americans burning more fossil fuels despite strong public and scientific support for shifting to renewable energy.

As an environmental engineering professor who studies ways to confront climate change, I think it is important to distinguish which energy technologies could rapidly cut emissions or need a financial boost to become viable from those that are already profitable but harm the environment. Unfortunately, the Republican bill favors the latter while stifling the former.

Cuts to renewable electricity

Wind and solar power, often paired with batteries, provide over 90% of the new electricity added nationally and around the world in recent years. Natural gas turbines are in short supply, and there are long lead times to build nuclear power plants. Wind and solar energy projects – with batteries to store excess power until it’s needed – offer the fastest way to satisfy growing demand for power. Recent technological breakthroughs put geothermal power on the verge of rapid growth.

However, the One Big Beautiful Bill Act rescinds billions of dollars that the Inflation Reduction Act, enacted in 2022, devoted to boosting domestic manufacturing and deployments of renewable energy and batteries.

It accelerates the phaseout of tax credits for factories that manufacture equipment needed for renewable energy and electric vehicles. That would disrupt the boom in domestic manufacturing projects that had been stimulated by the Inflation Reduction Act.

Efforts to build new wind and solar farms will be hit even harder. To receive any tax credits, those projects will need to commence construction by mid-2026 or come online by the end of 2027. The act preserves a slower timeline for phasing out subsidies for nuclear, geothermal and hydrogen projects, which take far longer to build than wind and solar farms.

However, even projects that could be built soon enough will struggle to comply with the bill’s restrictions on using Chinese-made components. Tax law experts have called those provisions “unworkable,” since some Chinese materials may be necessary even for projects built with as much domestic content as possible. For example, even American-made solar panels may rely on components sourced from China or Chinese-owned companies.

Princeton University professor Jesse Jenkins estimates that the bill will mean wind and solar power generate 820 fewer terawatt-hours in 2035 than under previous policies. That’s more power than all U.S. coal-fired power plants generated in 2023.

That’s why BloombergNEF, an energy research firm, called the bill a “nightmare scenario” for clean energy proponents.

However, one person’s nightmare may be another man’s dream. “We’re constraining the hell out of wind and solar, which is good,” said U.S. Rep. Chip Roy, a Texas Republican who is backed by the oil and gas industry.

Electric cars and efficiency

Cuts fall even harder on Americans who are trying to reduce their carbon footprints and energy costs. The quickest phaseout comes for tax credits for electric vehicles, which will end on Sept. 30, 2025. And since the bill eliminates fines on car companies that fail to meet fuel economy standards, other new cars are likely to guzzle more gas.

Tax credits for home efficiency improvements such as heat pumps, efficient windows and energy audits will end at the end of 2025. Homeowners will also lose tax credits for installing solar panels at the end of the year, seven years earlier than under the previous law.

The bill also rescinds funding that would have helped cut diesel emissions and finance clean energy projects in underserved communities.

Support for biofuels and fossil fuels

Biofuels and fossil fuels fared far better under the bill. Tens of billions of dollars will be spent to extend tax credits for biofuels such as ethanol and biodiesel.

Food-based biofuels do little good for the climate because growing, harvesting and processing crops requires fertilizers, pesticides and fuel. The bill would allow forests to be cut to make room for crops because it directs agencies to ignore the effects of biofuels on land use.

Meanwhile, the bill opens more federal lands and waters to leasing for oil and gas drilling and coal mining. It also slashes the royalties that companies pay to the federal government for fuels extracted from publicly owned land. And a new tax credit will subsidize metallurgical coal, which is mainly exported to steelmakers overseas.

The bill also increases subsidies for using captured carbon dioxide to extract more oil and gas from the ground. That makes it less likely that captured emissions will only be sequestered to combat climate change.

Summing it up

With fewer efficiency improvements, fewer electric vehicles and less clean power on the grid, Princeton’s Jenkins projects that the law will increase household energy costs by over $280 per year by 2035 above what they would have been without the bill. The extra fossil fuel-burning will negate 470 million tons of anticipated emissions reductions that year, a 7% bump.

The bill will also leave America’s clean energy transition further behind China, which is deploying more solar and wind power and electric vehicles than the rest of the world combined.

No one expected President Joe Biden’s Inflation Reduction Act to escape unscathed with Republicans in the White House and dominating both houses of Congress, even though many of its projects were in Republican-voting districts. Still, pairing cuts to clean energy with support for fossil fuels makes Trump’s bill uniquely harmful to the world’s climate and to Americans’ wallets.

This article includes some material previously published on June 10, 2025.