How Trump’s Energy Tax Could Raise Your Energy Bills and Destroy Jobs

Put simply, Trump’s energy tax law is Robin Hood in reverse. Every lawmaker who voted for this cynical measure chose to extend tax cuts for the wealthiest over Americans’ health, their pocketbooks, public lands and waters, and a safe climate.

In addition to attacking critical public services like Medicaid and food aid for children, the law contains within it one of the largest remakes of U.S. energy policy in the past four decades. At its core, this law will stifle growth in clean electricity and electric vehicles (EVs); at the same time, it will mandate the largest auction in U.S. history of public lands and waters for oil and gas drilling, commercial logging, and coal mining.

While oil and gas executives, industrial loggers, and coal CEOs celebrate, this law could result in the largest electricity bill price hike in history. Costs for things like cleaner cars, solar energy, and efficient air conditioners will skyrocket. And it could crush the renaissance in American clean energy production, sending billions of dollars in investment to our foreign rivals instead. So much for “America first.”

The Trump energy tax—which includes this law and rollbacks of standards—could mean energy bill increases and job losses. One analysis predicts a hike of more than $50 billion a year in Americans’ energy bills within the next decade. Another finds it could result in 760,000 jobs lost annually by 2030.

The more than 1,100-page legislation stifles the cheapest and fastest-to-deploy energy sources while further propping up Big Oil and other fossil fuels. And it would take hundreds of millions of acres of federal lands away from the public and auction them off to industry.

Here’s an overview of some of the most egregious provisions that could impact your bills, your job, your health—and your family’s future.

Solar and wind

The United States is undergoing a renewable energy renaissance, with new additions of solar, wind, and battery power dominating the power sector. Last year, more than 90 percent of the new power added to the U.S. grid came from these technologies; the same is estimated to be true for this year. That’s because they are the cheapest options—and also the quickest and easiest to build.

The new law ends incentives for solar and wind power, phasing them down through 2027. It also includes a maze of new provisions on business relationships with companies from certain countries that could be used nefariously by the administration to make the credits difficult or impossible to use, even during that transition period.

The net effect will be a halving of new solar and wind construction over the next decade, which will mean less total energy investment in the United States because there is no other new electricity source that is primed and ready to go like these are. Tax credits for batteries and geothermal and nuclear power will remain in effect—but with complex new restrictions on business relationships with companies from certain countries.

Electric vehicles

This law repeals a $7,500 consumer tax credit for buying a new EV and a $4,000 one for a used EV as of September 30 of this year. This credit, which was reworked and expanded by Congress in 2022, saved consumers more than $2 billion on the purchase of at least 300,000 new or used EVs last year, and it had helped make EVs the cheaper option when considering the full lifetime cost of owning a new car. Congress has now also axed a provision that allowed those leasing a new EV to benefit from the tax savings.

The law will also terminate early a tax credit for installing new EV charging stations and home charging equipment, although that will remain in place for a year. And although automakers may still retain some benefits that have helped spur a domestic boom in battery production, the so-called 45X tax credit will have new constraints on companies that license foreign technologies, and how those rules are applied could determine how useful—or not—it will be.

That law also eliminates the penalties that automakers pay when they violate the U.S. Department of Transportation’s fuel economy standards. What this means for drivers is less trips to the pump to fill up. The fuel economy standards updated last year were estimated to save drivers $23 billion in fuel costs and avoid the consumption of about 70 billion gallons of gasoline through 2050. Those savings could now be lost, as our hard-earned money goes to line the pockets of billionaire oil executives.

Home energy upgrades

For homeowners looking to upgrade their air conditioners, water heaters, or insulation, the Inflation Reduction Act provided support to help defray initial costs. These credits of up to $3,200 were crucial for homeowners because a new heat pump, for example, will save consumers money on their energy bills over its lifetime, but the initial cost may be greater than a less efficient model. This new tax law ends those tax credits as of the end of this year, as well as separate homeowner credits for rooftop solar projects.

Public lands

This law contains the biggest giveaway in U.S. history of public lands for the oil and gas, coal, and commercial logging industries. Not only will it offer more of our public lands and waters for drilling, but it slashes the royalty rates those companies must pay. And it allows companies to pay to get an expedited environmental review. In direct contrast to the oil and gas industry, generators of solar and wind power on federal lands will see massive fee increases, paying upwards of five times more than previously established.

In addition, it mandates quarterly oil and gas lease sales, hands over control of what is offered for lease to industry, lengthens the lease terms, prohibits requirements to limit environmental impacts of oil and gas production, and revives the wasteful, corrupt practice of noncompetitive leasing.

It’s worth noting that analysts who looked at this do not expect any new drilling on U.S. public lands and waters to lower the costs that Americans pay at the pump.

Pillaging Alaska

The law mandates four 400,000-acre lease sales in the Arctic National Wildlife Refuge and at least five 4-million-acre lease sales in the National Petroleum Reserve-Alaska within the next decade. It mandates that the federal government rubber-stamp all relevant permits, including for roads and pipelines. And it sets a path for the administration to further repeal rules that protect irreplaceable ecosystems, imperiled wildlife, and Indigenous subsistence cultures.

New coal mining

While coal production on federal lands is on a historic decline, this law attempts to revive it by mandating the opening of 4 million acres of federal lands for coal mining and expediting the new coal leases and mining permits. It also slashes what coal executives must pay in royalties for both future and even existing coal production.

Offshore drilling

The law requires an unprecedented number of mandated lease sales from the Gulf of Mexico to the Cook Inlet in Alaska. It requires at least 30 lease sales in the Gulf, each totaling at least 80 million acres, while forcing the removal of critical environmental safeguards like protections for endangered and threatened marine mammals by locking in outdated leasing terms. It requires six lease sales in Cook Inlet, each totaling at least 1 million acres.

All of this new drilling would happen without the basic well safety practices that were put in place after the devastating Deepwater Horizon blowout in 2010.

Commercial logging in national forests

This law creates for the first time a mandatory logging minimum on the National Forest System, requiring progressively more timber sales every year for the next nine years. It mandates that the Forest Service ink at least 40, 20-year logging contracts each year through 2034. The Bureau of Land Management must have similar sales.

Gutting national park funding

While oil drillers, coal miners, and commercial loggers will get unfettered new access to public lands, the American public will not be so lucky. The law cuts $267 million of the unspent funds that Congress had provided to the National Park Service to support staffing, conservation, rehabilitation, and resilience for years to come.

Conclusion

This Trump tax law is a disaster for everyday Americans. It also comes as the devastating impacts of climate change become tragically clearer every day. It was signed the same weekend that the nation experienced horrific flooding across three states and a heat wave battered millions, all while the hurricane season looms—driving home the real consequences of turning our backs on the climate fight. Gutting the single-largest effort the nation has taken to address climate change will continue to fuel more extreme weather nationwide and put more communities in harm’s way.

Yet, we know the vast majority of Americans want more clean energy and climate action—not less, which is one reason this legislation was so unpopular. And despite efforts to strangle it, clean energy will continue to grow, just not as fast as we need or want. We must keep pushing climate and clean energy progress in city halls and statehouses across the country—and around the world. And we must do everything we can, at all levels, to better protect people and communities from the growing impacts of climate change.