The Senate’s new excise tax—part of the updated bill text for reconciliation—would increase consumer electricity prices 8-10% and tax clean energy businesses an additional $4-7 billion by 2036.
The new and unprecedented tax on energy applies to any solar or wind project that starts construction following the enactment of the bill through 2036.
- The tax is applied to projects even if they don’t claim the solar or wind energy tax credits, and even after the tax credits expire.
- The tax is applied if the products and components used in the project exceed a specified threshold of content
from non-compliant entities.
The tax has not been fully evaluated for its impact on energy consumer prices and business investments until now.
According to ACP analysis of the updated Senate bill:
- Electricity prices for consumers and businesses will rise by 8-10% and rise close to 20% in some states.
- With demand projected to surge 35-50% by 2040, there would be 300 GW less wind and solar project capacity built to meet it.
- Jobs and capital investment will plummet: 300,000 jobs will vanish and $450 billion in lost investment capital.
- Data center and AI companies will look overseas to find more reliable and affordable power sources, ceding the digital race to China.
The impacts we anticipate from this bill to the fastest-growing sectors of our energy industry are vast and will hit communities across the United States, but will especially hit hard in rural communities who would have been the greatest beneficiaries of clean energy investment.