Texas Electricity Costs Are Set to Rise — and Federal Policy Just Threw Gas on the Fire

By Adam Glick, Solar Sherpa, NATiVE Solar

Updated September 2026. This article was originally published in July 2025, shortly after the One Big Beautiful Bill Act passed. The cost figures below reflect data available at that time. The federal tax credit guidance has been updated to reflect where things stand now.

More current NATiVE resources:

If you’re concerned about rising energy costs (ie your monthly utility bill), you’re not alone -and it’s not just inflation. Texas is already on a path toward higher electricity costs, driven by surging demand, infrastructure strain, and market volatility.Now, with the recently passed One Big Beautiful Bill (OBBB) gutting key solar and clean energy incentives, the long-term energy affordability outlook for Texans just got worse.

Texas Power Bills: Already Trending Up

As of 2025, the average residential electric bill in Texas is $170.63/month, up from $165.94 in 2024 (ChooseTexasPower).
Texans now pay roughly 14.8¢ per kilowatt-hour, about 25% more than in 2021 (EIA).
ERCOT’s own forecasts show that reserve margins could tighten further this summer as demand peaks. (this also raises prices…)

What’s Fueling the Climb?

Demand Is Exploding

Texas’s population boom, tech growth, and industrial electrification are driving demand at an unprecedented pace.

“We expect electricity demand to nearly double by 2030.”

-ERCOT CEO Pablo Vegas (AP News)

Major demand drivers include:

AI and data center growth
Crypto mining operations
Climate change (weather is getting hotter and more violent more ofetn)

2. Supply Costs Are Rising

Natural gas prices are expected to rise roughly 24% over the next 18 months (ComparePower).
New power plants now cost 30–100% more to build than just two years ago (Reuters).
Post-Winter Storm Uri grid upgrades are costing ratepayers more than $30 billion in infrastructure surcharges (ElectricityPlans).

The Big Beautiful Bill: Making a Bad Trend Worse

Let’s be clear: Texas electricity costs were already climbing before the One Big Beautiful Bill passed. But by eliminating key clean energy incentives and phasing out the 30% solar tax credit, the bill removes the very policies that were helping stabilize long-term prices.

According to Energy Innovation modeling:

Texas is expected to lose 77 GW of planned, new, clean energy capacity — enough to power 19 million homes.
As a result, wholesale electricity prices could jump 25% by 2030 and up to 74% by 2035.
Household electric bills could increase by $220/year by 2030 and $480/year by 2035.

“Instead of adding 104 GW of new electricity supply in the next 10 years, Texas is now expected to add only 27 GW.”

-Daniel O’Brien, Energy Innovation

“We are, in essence, pulling the rug out from underneath these projects.”

-Harry Godfrey, Advanced Energy United

The end of solar and storage incentives doesn’t just hurt project developers — it limits competition and future supply, which in turn puts more pressure on fossil fuels and further increases consumer costs.

What This Means for Texans

Trend	Retail Electricity Rate Impact
Surging Demand	Grid strain and price spikes during summer peaks
Higher Supply Costs	More expensive fuel and new construction passed on to customers
Loss of Clean Energy Incentives	Less new generation, less competition, higher rates

What You Can Do Right Now

Be mindful of how you consume electrical energy – conserve where and when possible
Understand where federal incentives stand now. The 30% residential solar tax credit (Section 25D) ended for systems installed after December 31, 2025. For commercial projects, the Section 48E credit remains available for solar placed in service by December 31, 2027, and battery storage keeps a longer runway. Eligibility varies, so confirm with a tax professional. See our homeowner update and commercial update.
Consider solar + battery storage as a long-term hedge, and look into Texas property tax exemptions, utility incentives, and virtual power plant programs that may still apply
Stay informed — monitor ERCOT alerts and understand your utility’s pricing structures

Final Thought

The Big Beautiful Bill didn’t create Texas’s energy cost problem, but it’s going to make it worse by removing critical tools that were helping keep future rates in check. A rapid acceleration of rising energy costs (ie electricity bills) starts now.

If you’re a Texas homeowner or business looking for cost stability, it’s worth evaluating your options now Solar and storage aren’t just good for the grid — they’re a smart hedge against an increasingly unpredictable energy market.

Solar + storage may help reduce your exposure to rising and volatile energy costs over the long run.

Get Started with NATiVE Solar or call us at 855-234-3131