Changes in federal energy policy slow renewable energy development and will likely contribute to higher electricity costs over the next decade.
Federal energy policy changes could significantly slow the development of new renewable energy projects over the next decade, according to new modeling from the Natural Resources Defense Council (NRDC). The analysis estimates that changes to federal tax incentives, tariffs, and offshore wind policies could result in between 390 and 540 gigawatts less wind, solar, and energy storage capacity being added nationwide than previously projected. NRDC’s modeling indicates that much of this lost generation would not be replaced by new natural gas capacity, citing turbine supply constraints, fuel-price uncertainty, and the relative cost competitiveness of renewable generation.
The analysis also points to potential implications for electricity costs as the power sector relies more heavily on existing generation resources to meet growing demand. NRDC projects that the power sector could spend an additional $5 billion to $15 billion on fossil fuels while receiving roughly $45 billion less in federal clean-energy tax incentives compared with its previous baseline. Under the organization’s modeling, average household electricity rates could be approximately 4.2% to 5.5% higher nationwide by 2035 than under its January 2025 projections. Separately, industry research continues to show substantial interest in new natural gas generation, although supply-chain, financing, and project-development constraints leave uncertainty around how much of that proposed capacity will ultimately be built.
