Why U.S. Energy Costs Are So High Right Now And How to Lower Your Electricity Bill

If you’ve been feeling pinched by your electricity bill this summer, you’re not alone. Electricity prices have been climbing across the country—nearly twice as fast as inflation. In June, the U.S. Energy Information Administration warned that residential electricity bills would see a “slight increase” from June through September. Federal data shows that electricity costs are 5.5% higher today than they were a year ago, with natural gas up by 13.8%. And while nearly three-fourths of Americans are concerned about higher electricity and gas bills, nearly 60 utilities are increasing or trying to raise electric bills by a total $38.3 billion and gas bills by $3.5 billion, affecting 56.7 million electric and 26 million natural gas customers, according to research from the Center for American Progress published in mid-June. While the Trump Administration vowed to halve electricity prices, President Trump has blamed clean energy for price hikes. “Any State that has built and relied on WINDMILLS and SOLAR for power are seeing RECORD BREAKING INCREASES IN ELECTRICITY AND ENERGY COSTS,” Trump said in a Truth Social post on August 20. “We will not approve wind or farmer destroying Solar.” There is no link, however, between average state energy prices and how much of their share of energy is provided by renewable sources. A recent analysis by Heatmap found that, in states with higher adoption of renewables, prices have either risen more modestly than average or even fallen. Why are electricity prices so high? The sharp surge in electricity prices was caused by a perfect storm of factors that are placing a strain on energy supplies. Both natural gas and electricity prices have faced recent uncertainty—the Russia-Ukraine war, extreme weather events, and increased demand are among the factors that drove natural gas prices up to a two year high in March, while electricity prices faced uncertainty following Trump’s tariff announcements, as several U.S. states import energy from Canada.  And demand is higher than ever. “Many of the rate hikes and fuel costs pass-throughs [applied to customers’ monthly bills] that we are seeing right now are because of the high demand for AI data centers,” says Shannon Baker-Branstetter, senior director of domestic climate policy at the Center for American Progress. Reports show that data centers will require significant upgrades to the electric grid—which could potentially be passed on to residents and small businesses if lawmakers don’t get tech companies to foot the bill. “The Trump Administration is adding fuel to this fire by blocking renewable energy projects, wind and solar projects, [which] would have added more affordable energy and help meet demand.”  Read more: The Backlash to High Electric Bills Could Transform U.S. Politics The Trump Administration has been rolling back clean energy investments that are far more cost-effective than fossil fuels. The administration’s “Big Beautiful Bill,” signed into law on July 4, could increase household energy costs by anywhere from $170 to $280 per year by 2035, according to two estimates from Energy Innovation, a non-partisan energy and climate think tank and Princeton University’s Rapid Energy Policy Evaluation and Analysis Toolkit. “The bill rolls back a slew of tax credits, and it’s trying to put a strangle hold on the growth of clean energy at a time where we desperately need new clean energy in America,” says Dawone Robinson, managing director in the climate and energy department at the Natural Resources Defense Council.  Climate change is only going to further energy demands—as people cool their homes more frequently during periods of extreme heat and extreme weather events damage the electric grid. “Climate change is increasing demand for cooling and making it more expensive to provide a reliable electric grid,” says Baker-Branstetter.  How can I lower my electricity bill? The first step, experts say, is to examine your consumption. “The cheapest form of energy is the energy we never use,” says Robinson. Making sure your home is properly insulated and adjusting your thermostat so you’re not paying to heat or cool your house when no one’s home are just some of the steps you can take to be more efficient.  Look into weatherization improvements, like fixing leaky doors and windows that allow heat to escape, as well as installing solar panels and heat pumps. “If people can either do rooftop solar or a community solar program in their area, that can also help insulate against price hikes, because solar is generally much more affordable,” says Baker-Branstetter. Federal tax credits can help you make energy efficient home improvements and install solar panels, but be sure to take advantage of them before they expire at the end of this year. Read more: The U.S. Climate Movement Is Starting to Talk About Household Energy Bills If you’re having trouble paying your bill, contact your utility company to see if they can offer you a payment plan. State and local governments often offer relief programs to prevent shutoffs—and many states do not allow shutoffs, especially during dangerous weather conditions, says Baker-Branstetter. And see if you qualify for the Low Income Home Energy Assistance Program, known as LIHEAP, a federally-funded and locally administered program that assists low-income households with paying home energy bills.   In the long-term, experts say that diverse and sustainable energy sources are the solution to our growing energy needs. “If we want to [meet our energy needs] responsibly, in a way that is cheap, effective and reliable,” says Robinson, “we need to be doubling down on clean energy solutions that are going to create jobs and help us solve the climate crisis.”