Energy prices may soon increase in Tennessee.
The U.S. Senate is expected to vote on President Donald Trump’s massive tax policy, known as the “big beautiful bill,” within a month. It affects a broad range of domestic policy, ranging from increased military spending to reduced Medicaid, food stamps and taxes.
A key target in the bill is repealing most tax credits for clean energy.
Analysts say this will raise energy costs in Tennessee, threaten manufacturing jobs and increase planet-warming pollution.
Trump’s tax bill could slow clean energy growth
In the bill’s current form, consumer tax credits for electric vehicles, heat pumps, solar panels and energy efficient windows will be phased out within a year. These tax credits were introduced under former President Joe Biden’s Inflation Reduction Act in 2022.
The bill also decimates tax credits for renewable energy, which has been the most common and often cheapest form of new electricity. Last year, 94% of new electricity capacity in the U.S. came from solar, wind or batteries.
At the same time, electricity demand is starting to increase after remaining flat for decades. National electricity demand surged 3% last year, largely due to a hotter summer and partially because of new data centers used for artificial intelligence. U.S. exports of fracked gas are also expected to increase, which could raise domestic prices for heating and electricity.
American households could consequently pay as much as $400 more each year on energy bills within a decade, according to analysis by the research firm Rhodium Group.
Tennessee is forecasted to have one of the highest electricity increases in the nation. One analysis found that annual electricity bills could increase by more than 10%, or roughly $200 for the average home, by next year.
The state has already faced higher monthly bills as the Tennessee Valley Authority, the utility that provides nearly all electricity to Tennessee and parts of six other states, has been rapidly expanding its fossil fuel footprint with new gas plants and pipelines. TVA raised electricity rates by 9.75% between 2023 and 2024.
More: Fossil fuels are 90% of TVA’s capital expenditures next year — and you’re paying for it | WPLN News
Trump’s bill could impact another part of the local energy economy: Tennessee’s manufacturing boom. In the past three years, the state has seen billions of dollars in investments for factories creating clean tech like EV batteries. Some analysts say these factories and their estimated 5,000 jobs in the state could soon be at risk.
“Jobs have been created and electric bills have been lowered. We urge members of Congress to maintain these tax incentives so that the people of Appalachia can continue to reap their benefits,” Chelsea Barnes, a director with the environmental group Appalachian Voices, said in a statement. The group cited specific examples of tax credits helping communities in the state, like a money-saving rooftop solar installation at the First Presbyterian Church of Oak Ridge, in a new report.
Ultimately, as climate change accelerates, the bill could delay the transition to cleaner energy, which has been ramping up in recent years. The bill also contains goodies for the fossil fuel industry, including an end to taxing excess methane emissions and expedited approval for new oil and gas projects.
An analysis by Princeton University forecasted that a full repeal of current energy and climate policies would increase U.S. greenhouse gas emissions by more than 1 billion metric tons per year by 2035. Researchers said the current version of Trump’s bill is “substantively similar” to a full repeal.
