What Repealing the Inflation Reduction Act Could Mean for Americans and the Cost of Living
Building cheap, clean energy has a real impact on the wallets of Americans and that’s what so infuriating about this talk about repealing the Inflation Reduction Act (IRA), passed in 2022. While the IRA is not perfect, its goals were clear to reduce consumer costs and drive economic growth through domestic manufacturing, and clean energy development – all through a system of clean energy tax credits and funding programs.
Recent proposals to repeal the legislation could have major, direct consequences for the average American household — most notably, higher electricity bills. And that’s not even getting into the larger economic impact from moving away from low-cost sources of electricity, like solar and wind.
Already, freezing funding for IRA programs have stalled more than 60 new projects, costing more than 42,000 announced jobs and $57 billion in investment, according to Energy Innovation.
Less Investment in Solar and Wind Reduces Supply of Low-Cost Energy
Experts warn that pulling back on the IRA’s clean energy incentives would sharply reduce investment in wind and solar, leading to increased reliance on more expensive fossil fuel power. A report commissioned by ConservAmerica projects $520 billion less solar and wind investment through 2035.
At the heart of the issue is cost. Wind and solar energy, once built, have no fuel costs and significantly lower operating and maintenance expenses compared to traditional power sources like coal, oil, gas, and nuclear energy. If the IRA is repealed and clean energy deployment slows, utilities will need to lean more heavily on these higher-cost sources, driving up system-wide fuel and operating expenses.
Cost Increases Will Passed Directly to Consumers
According to recent analysis by ConservAmerica, the cost of electricity generation could rise by roughly $20 billion in 2030 and $51 billion in 2035 due to the reduction in clean energy infrastructure investment. And those costs won’t be absorbed by power companies — they’ll be passed directly to consumers.
The same analysis estimates that repealing the IRA could increase average U.S. utility bills by an average of $83 per year, and in seven states by more than $152 per year. By 2026, less conservative projections suggest that the typical American household could see electricity costs raise by 7% as soon as 2026. For lower-income families and small businesses already struggling with inflation and economic uncertainty, these increases could be especially burdensome.
Repealing the Inflation Reduction Act could increase the average utility bill in the U.S. by $83 per year, and in some states even higher by $152 per year.
Image Courtesy of Solar Energy Industries Association
Why Can’t We Just Build More Coal, Gas, and Nuclear
The fact is that renewables plus storage can meet the need now for our growing electricity demand with nearly 2,000 GW of wind, solar and storage projects in development. PureSky Energy alone has over 800 MWs of solar and energy storage in development and we expect to construct nearly 60 MW by the end of this year. Nuclear, gas, and small modular reactors have a much longer lead time and may only be deployable as soon as 2027. Their projected capacity is also not enough to meet the total projected demand.
The reality is that we need a variety of energy sources to meet growing demand from our increasing electrification and the boom in power-hungry data centers. It’s not about picking sides here - it’s about meeting growing demand with a supply of electricity that can be deployed quickly and at a low cost.
It’s reasonable for Americans to expect that reliable, low-cost energy would be prioritized and that, as an added bonus, it would be non-polluting. What’s also reasonable is the expectation that their electricity costs will not have to go up because higher cost electricity sources are prioritized.
What’s the Role of the IRA in all This?
The IRA provides long-term tax credits and subsidies for solar, wind, battery storage, and other renewable technologies, which lower the upfront cost of these projects and accelerate their deployment. Without these incentives, clean energy developers could scale back, and utilities would be forced to invest in more capital-intensive and fuel-dependent infrastructure.
In short, the repeal of the IRA would not just slow progress on climate goals — it could also hit Americans directly in the wallet.
This is a very real possibility since the House passed a bill in spring 2025 by a margin of just one vote that would cut most of the clean energy programs put in place by the Biden administration.
