Rising U.S. Power Prices Not Due to Clean Energy - See the Graph
In a recent survey, three out of four Americans expressed concern over the increasing utility bills. This concern is well-founded, as electricity prices in the U.S. are on the rise, outpacing inflation by more than twice.
According to data from the U.S. Energy Information Administration, the average U.S. power price in 2020 was 13.15 cents per kilowatt-hour. This year, the average price is expected to reach 17 cents per kilowatt-hour, marking a 23% increase from 2020 to 2026.
Several factors contribute to this rise. An aging distribution grid requires expensive repairs, and climate change-induced wildfires and storms have caused damage to the electricity system, adding to the costs.
The volatile price of natural gas, which accounts for around 40% of U.S. electricity production, is another significant factor.
The GOP megalaw signed by former President Trump last month is expected to further increase electricity prices over the next decade. According to estimates by Rhodium Group, the legislation could result in the U.S. installing as much as 62% less clean energy, slowing the growth of renewable energy and increasing electricity prices.
Renewable energy, particularly solar, wind, and batteries, are the cheapest form of power. However, if renewable energy construction slows and data centers and consumers require more power, a dynamic of too much demand and not enough supply could develop, leading to even higher energy bills for Americans.
It's important to note that the Trump administration's attempts to limit clean energy development could exacerbate the rising electricity costs in the U.S. Contrary to claims by some Republican leaders, a 2024 report from research group Energy Innovation found no evidence that clean energy is the primary driver of rising electricity prices.
For more detailed information on this topic, visit our website to explore the "Chart of the week" column. The U.S. Energy Information Administration also published a report on electricity costs in the U.S.
Since President Donald Trump took office, household electric bills have risen another 10%. Skyrocketing demand for power, as people electrify their homes, businesses, and cars, and as data-center developers seek more energy for their AI ambitions, is increasingly a factor.
The rising electricity prices have significant consequences. They eliminate good clean energy jobs and result in more pollution and higher energy costs nationwide.
In a time when concerns about utility bills are at an all-time high, understanding the causes and consequences of rising electricity prices is crucial for Americans.
