Here’s how the “Big Beautiful Bill” will impact Minnesota ratepayers 

President Trump signed the One Big Beautiful Bill Act into law on July 4. Much has been written about the bill's effect on taxes, funding for border enforcement and immigration, Medicaid, and food assistance.  

Clean energy provisions were another major target of the reconciliation bill. We’ve written on it already, but in short, the bill will increase Minnesotans’ energy bills, make home energy improvements more expensive, cut Minnesota jobs and GDP, and slow the expansion of clean power generation, just as electricity demand is surging. 

CUB champions affordable, reliable, safe, and clean home energy for all Minnesotans. We are deeply concerned that this bill moves us in the opposite direction of this vision. Keep reading to learn more about how the bill will impact Minnesota. 

The bill will increase the cost of electricity and slow the development of electric generation. 

Analysis conducted by think tank Energy Innovation projects that the bill will increase electric rates for Minnesotans will increase anywhere from 25 to 42%, costing ratepayers $2.6 billion over the next decade. The average Minnesota household could see its annual energy bill increase by more than $400 by 2035. A host of other organizations, institutions, and individuals have also concluded that the bill will increase energy costs, including the U.S. Chamber of Commerce, Clean Energy Buyers Alliance, the Rhodium Group, and Republican Sen. Tom Tillis.  

In multiple ways, the bill favors fossil fuel industries like oil, gas, and coal. It increases oil, gas, and coal leasing, lowers oil and gas royalty rates, and increases fees for renewable energy projects on public lands. A new subsidy to oil and gas companies exempts them from the corporate alternative minimum tax.  Coal, oil, and natural gas are not found in Minnesota and must be imported from out-of-state. Some of these measures may put downward pressure on fossil fuel costs, but any savings are far outweighed by other impacts that will push energy costs upward. 

The bill quickly phases out technology-neutral tax credits that have long supported energy generation, including the production and investment tax credits that have reduced the cost of wind, solar, and energy storage.  It is quicker, safer, and cheaper to take advantage of the renewable energy sources that Minnesota has in abundance. Even without the tax credits, wind and solar are cost competitive with – and often cheaper than - fossil fuel generation. But the loss of the tax credits will drive up the cost of electricity overall – and will contribute to slowing the development of new power generation at a time when demand growth is accelerating. (More on that below.)  

The bill will make home energy improvements more expensive. 

A key component of the transition to Minnesota’s goal of a carbon-free economy is upgrading our home energy use by weatherizing our homes, replacing old inefficient appliances, and or switching to electric vehicles. The 2022 Inflation Reduction Act moved many levers that reduced costs for residential home energy purchases. The bill does away with many tax credits and incentives that made those building upgrades and equipment replacements more affordable, and that allowed households to plan improvements over time. 

• The Energy Efficient Home Improvement Credit, which was greatly expanded through the Inflation Reduction Act, provided up to $3,200 annually in tax credits through 2032 for efficiency improvements, home energy audits, and efficient heating systems like heat pumps. That credit will now end this year. In order to access it, improvements must be placed in service by December 31, 2025.
• The Residential Clean Energy Credit, which provided a 30% credit on rooftop solar and other renewable generation for homes, is now repealed for any expenses made after December 31, 2025.
• The $7,500 credit for new and $4,000 for dealer-sold used electric vehicles will be gone effective September 30, 2025.
• The credits for builders of new energy-efficient homes and the credit for energy-efficient commercial building construction go away after June 30, 2026. 

We encourage any consumer planning a home energy upgrade to take into account the dates listed above and consult with a tax professional to plan accordingly. If you've been planning on making home energy improvements, purchasing a heat pump, or replacing your water heater, you may want to consider doing so more quickly in order to take advantage of the tax credit.  State, utility, and local rebates still exist, but the loss of these tax credits will make it more expensive for households to upgrade and modernize their home energy use. 

If you’re looking for information about making energy-efficient upgrades to your home, take a look at our Replacement & Upgrades guide. 

You can set up an Energy Bill Consultation with CUB to discuss your home energy journey and how these changes may impact your energy plans for the future. 

The bill will slow the expansion of power generation just as demand is set to surge. 

After years of little or no change in overall electricity demand, demand is now projected to grow sharply. As more and more individuals electrify their home energy use – moving away from fossil fuel powered appliances towards electric alternatives – more capacity must be added to accommodate the demand. Even more pressing is the amount of electricity required to meet the needs of new manufacturing, data centers, and artificial intelligence projects. These sectors use an extraordinary amount of energy. According to the Star Tribune, the 10 data centers proposed for development in the state as of January 2025 “could consume as much electricity as every home in Minnesota.” 

The tax incentives that helped foster the buildout of wind and solar facilities are now gone or greatly diminished. Incentives for other forms of zero-emissions energy, like nuclear or geothermal, have longer phase-out periods, but those projects take much longer (and are much more expensive) to build. 

Pete Wyckoff, Deputy Commissioner of Energy Resources for the Minnesota Department of Commerce, put it this way: “Even without the tax credits, if you're going to build new (power) generation, and you're really paying attention to just what it costs, you're still going to build wind and solar. But you’re probably going to do it slower, because your budget for doing such things only goes so far.” 

Energy Innovation projects the bill will reduce the deployment of electricity generation in Minnesota by about 25% by 2035. That’s 3.5 gigawatts of electricity generation that is needed in our region.  

The bill will cut Minnesota jobs and reduce Minnesota’s GDP. 

As noted above, tax credits and incentives have supported major expansion of the solar and wind industries. According to the 2023 Clean Jobs Midwest report, Minnesota's clean energy industry employs nearly 60,000 workers, and investments in clean energy projects across the state were expected to grow. 

 Now, due to the lack of incentives to deploy renewable generation and clean energy manufacturing, the buildout of power generation is projected to slow considerably.  

This loss of significant private investment could result in a $1.5 billion reduction in Minnesota’s GDP by 2030. According to Energy Innovation, "[w]orkers will suffer from factory closures and construction halts.” The group forecasts job losses of 10,000 jobs in 2030 and 15,000 jobs in 2035 in Minnesota due to the bill. 

What’s next 

These federal changes increase energy prices and delay the expansion of renewable generation. We’re also worried about the Trump Administration's proposal to eliminate the long-standing Low Income Home Energy Assistance Program, which could happen in a separate federal bill later this year. But CUB is committed to making sure that every Minnesotan has access to affordable, reliable, safe, and clean home energy. We’ll continue advocating at the Minnesota Legislature and the Public Utilities Commission to protect consumers from unfair rate hikes and excessive corporate profits, and to make sure that utilities are transparent about what costs they are passing on to consumers. 

Just this year at the Legislature we won protections for consumers, shielding them from costs associated to serve data centers and ensuring that any federal changes to the Low-Income Heating Energy Assistance Program won’t impact affordability programs in Minnesota. We’ll continue our advocacy next session. 

In the meantime, we are a resource for all energy consumers in the state. 

• If you or someone you know is struggling with energy bills or a shutoff notice, take a look at our Shutoff Help guide.
• If you have questions about making home energy upgrades, and how these federal changes fit into your energy planning, set up an Energy Bill Consultation.
• Sign up for our newsletter to receive updates on utility and energy developments in your inbox.
• Donate today to support our efforts to protect Minnesotans.
• Contact us at any time for support. 

*In preparing this article, we relied on analysis prepared by S2 Strategies.