Analysis: Repealing Clean Energy Tax Credits Could Raise Energy Costs in Mi, U.S.

Apr 04, 2025

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.

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