A new analysis from the think tank Energy Innovation warned repealing clean energy tax credits could significantly increase energy costs in Michigan and nationwide.

According to the report, eliminating the credits would add $140 per year to household costs in the Great Lakes State and increase household energy bills nationwide by billions annually over the next five years.

Dan O'Brien, senior modeling analyst at Energy Innovation, said the proposed budget bill in Congress could eliminate two key tax credits to fund nationwide tax cuts, potentially driving up energy prices.

"In the next five years, we would see somewhere around $6 billion of cost increases for households across the country," O'Brien reported. "They're going to see increases in the near term of something like $50 in the long term, $300 to $500 in certain states."

Proponents of the cuts maintain they are vital for lowering taxes, stimulating growth, balancing the budget, and reducing reliance on the government. They also contended the reductions will curb wasteful spending and help lower the deficit and inflation.

O'Brien noted more than 90% of wind turbines in the Midwest are on farmland, supporting farmers even during droughts. He highlighted Michigan's industrial and manufacturing sectors, which have high electricity demand and increase the need for renewable energy.

"If you don't have sources like solar batteries, wind on the grid that can push down electricity prices and that are supported by incentives, like the tax credits, you're going to see business costs go up," O'Brien contended.

He added the fate of these tax credits is uncertain, hinging on the House Ways and Means Committee's decisions to cut spending and reduce the federal budget.

Renewable energy got short shrift in the budget bill passed by Congress last week and a New Mexico trade association said companies and their employees will suffer.

The bill quickly phases out tax incentives and investments for wind and solar power passed under the Biden-era Inflation Reduction Act.

Jim DesJardins, executive director of the Renewable Energy Industries Association of New Mexico, said both consumers and businesses in the solar industry have made huge investments due to the incentives.

"There's people who've got loans on their homes, and overnight this bill is going to pull the rug out from underneath them," DesJardins asserted. "This will destroy thousands of businesses, will put tens of thousands of people out of work, for what? Why are we doing this?"

Since passage of the Inflation Reduction Act in 2022, a boom in renewable energy has led to more than $300 billion in spending. Another $500 billion dollars was allocated for clean energy projects but those could now be abandoned.

New Mexico is the second-largest crude oil producer in the U.S. and with more than 300 days of sunshine, it is considered among the top 10 states for potential solar development. Most experts are not predicting a collapse in the renewable energy industry but without federal subsidies and tax credits, solar and wind farms could become more expensive.

After signing a contract, DesJardins pointed out it can take years to get a solar project off the ground and Trump's new bill would let incentives expire before the end of 2027.

"There's just so much uncertainty for a large solar project you can't say, 'Oh, we're going to put it into operation on this day.' It just doesn't work like that," DesJardins stressed. "We need to stop this herky-jerky way of doing policy whether it's for farmers, whether it's for renewable energy, it's just very counterproductive."

Despite the setback to wind and solar, DesJardins believes renewable industries will persevere, one way or another.


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After being debated for days, Sen. Mike Lee, R-Utah, and Sen. John Curtis, R-Utah, are among those who voted to advance the "One Big Beautiful Bill Act" to push President Donald Trump's agenda forward.

Curtis was one of a handful of Republicans who wanted to preserve clean energy tax credits but the Senate made major cuts to tax incentives for wind and solar projects. Now, the bill does not allow for a project to get the tax credit if it does not begin producing electricity by 2028.

Sean Gallagher, senior vice president of policy for the Solar Energy Industries Association, said the change could reverse years of progress and innovation.

"It has really devastating impacts," Gallagher emphasized. "Not just to the solar industry, but to American energy security and national security. Solar energy is putting more new power on the grid than every other fuel source combined in the last several years."

Curtis was able to remove a provision that would've enacted a new tax on solar and wind projects and ended a ban on solar leasing. While Curtis expressed gratitude to Senate leaders for including his changes, Gallagher hopes the concessions do not hinder the industry's ability to meet demand. The budget bill now goes back to the U.S. House for what could be the final vote.

Projects started before the bill is enacted would be protected from penalties and setbacks. Current projects would also retain all of their tax-credit value through December 2027. Gallagher argued the tax credits, passed under the Inflation Reduction Act, are working.

"Every dollar spent on clean energy tax credits has a $2.67 return in the form of lower energy costs for consumers, and taxes paid by clean energy infrastructure projects, mostly property taxes," Gallagher pointed out.

The Trump administration has called for energy dominance and so far has focused on supporting more development of fossil fuels over renewable energy. And while wind and solar energy are still popular across the board, recent polling indicates some people, especially Republicans, are less supportive of renewable energy than in Trump's first term.


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Groups representing workers in the renewable power sector are slamming the possible repeal of clean-energy tax credits in the "One Big Beautiful Bill Act" currently before the U.S. Senate.

The bill would repeal tax credits for solar and electric cars, part of President Joe Biden's Inflation Reduction Act.

Bob Keefe, executive director of E2, a national organization of business leaders who advocate for smart clean-energy policies, said the bill could crush the clean-energy economy and not just in blue states such as California.

"If we ever wanted a policy in this country that would kill jobs, reduce business investments and make us less competitive, while also reducing our electricity supplies in this country, we've got it," Keefe contended.

In the past three years, companies have announced more than $130 billion in clean energy projects. Trump campaigned against the tax credits and wants to put the savings toward an extension of his 2017 tax cuts. A new report from E2 showed since Trump took office in January, companies have canceled more than $15 billion worth of projects.

Keefe pointed out California has the most clean energy jobs in the country, so it has the most to lose.

"There are more than a half a million Californians who work in clean energy, solar, wind, energy efficiency, electric vehicles," Keefe reported. "When you take away a 30% tax credit for building solar projects, sales are naturally going to decrease, projects are going to get canceled and jobs are going to be impacted."

Data show more than 75,000 Californians work in the electric vehicle industry. The bill eliminates the $7,500 EV tax credit which makes EVs more affordable. If the bill passes it would have to be reconciled with the House version and reapproved before it reaches the President.