You’ve reached your free article limit
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
A practical guide to using the climate law to get cheaper solar panels, heat pumps, and more.

Today marks the one year anniversary of the Inflation Reduction Act, the biggest investment in tackling climate change the United States has ever made. The law consists of dozens of subsidies to help individuals, households, and businesses adopt clean energy technologies. Many of these solutions will also help people save money on their energy bills, reduce pollution, and improve their resilience to disasters.
But understanding how much funding is available for what, and how to get it, can be pretty confusing. Many Americans are not even aware that these programs exist. A poll conducted by The Washington Post and the University of Maryland in late July found that about 66% of Americans say they have heard “little” or “nothing at all” about the law’s incentives for installing rooftop solar panels, and 77% have heard little or nothing about subsidies for heat pumps. This tracks similar polling that Heatmap conducted last winter, suggesting not much has changed since then.
Below is Heatmap’s guide to the IRA’s incentives for cutting your carbon footprint at home. If you haven’t heard much about how the IRA can help you decarbonize your life, this guide is for you. If you have heard about the available subsidies, but aren’t sure how much they are worth or where to begin, I’ll walk you through it. (And if you’re looking for information about the electric vehicle tax credit, my colleague at Heatmap Robinson Meyer has you covered with this buyer’s guide.)
Get one great climate story in your inbox every day:
There’s funding for almost every solution you can think of to make your home more energy efficient and reduce your fossil fuel use, whether you want to install solar panels, insulate your attic, replace your windows, or buy electric appliances. If you need new wiring or an electrical panel upgrade before you can get heat pumps or solar panels, there’s some money available for that, too.
The IRA created two types of incentives for home energy efficiency improvements: Unlimited tax credits that will lower the amount you owe when you file your taxes, and $8.8 billion in rebates that function as up-front discounts or post-installation refunds on equipment and services.
The tax credits are available now, but the rebates are not. The latter will be administered by states, which must apply for funding and create programs before the money can go out. The Biden administration began accepting applications at the end of July and expects states to begin rolling out their programs later this year or early next.
The home tax credits are available to everyone that owes taxes. The rebates, however, will have income restrictions (more on this later).
“The Inflation Reduction Act is not a limited time offer,” according to Ari Matusiak, the CEO of the nonprofit advocacy group Rewiring America. The rebate programs will only be available until the money runs out, but, again, none of them have started yet. Meanwhile, there’s no limit on how many people can claim the tax credits, and they’ll be available for at least the next decade. That means you don’t need to rush and replace your hot water heater if you have one that works fine. But when it does break down, you’ll have help paying for a replacement.
You might want to hold off on buying new appliances or getting insulation — basically any improvements inside your house. There are tax credits available for a lot of this stuff right now, but you’ll likely be able to stack them with rebates in the future.
However, if you’re thinking of installing solar panels on your roof or getting a backup battery system, there’s no need to wait. The rebates will not cover those technologies.
A few other caveats: There’s a good chance your state, city, or utility already offers rebates or other incentives for many of these solutions. Check with your state’s energy office or your utility to find out what’s available. Also, it can take months to get quotes and line up contractors to get this kind of work done. If you want to be ready when the rebates hit, it’s probably a good idea to do some of the legwork now.
If you do nothing else this year, consider getting a professional home energy audit. This will cost several hundred dollars, depending on where you live, but you’ll be able to get 30% off or up to $150 back under the IRA’s home improvement tax credit. Doing an audit will help you figure out which solutions will give you the biggest bang for your buck, and how to prioritize them once more funding becomes available. The auditor might even be able to explain all of the existing local rebate programs you’re eligible for.
The Internal Revenue Service will allow you to work with any home energy auditor until the end of this year, but beginning in 2024, you must hire an auditor with specific qualifications in order to claim the credit.
Let’s start with what’s inside your home. In addition to an energy audit, the Energy Efficiency Home Improvement Credit offers consumers 30% off the cost (after any other subsidies, and excluding labor) of Energy Star-rated windows and doors, insulation, and air sealing.
There’s a maximum amount you can claim for each type of equipment each year:
$600 for windows
$500 for doors
$1,200 for air sealing and insulation
The Energy Efficiency Home Improvement Credit also covers heat pumps, heat pump water heaters, and electrical panel upgrades, including the cost of installation for those systems. You can get:
$2,000 for heat pumps
$600 for a new electrical panel
Yes, homeowners can only claim up to $3,200 per year under this program until 2032.
Also, one downside to the Energy Efficiency Home Improvement Credit is that it does not carry over. If you spend enough on efficiency to qualify for the full $3,200 in a given year, but you only owe the federal government $2,000 for the year, your bill will go to zero and you will miss out on the remaining $1,200 credit. So it could be worth your while to spread the work out.
The other big consumer-oriented tax credit, the Residential Clean Energy Credit, offers homeowners 30% off the cost of solar panels and solar water heaters. It also covers battery systems, which store energy from the grid or from your solar panels that you can use when there’s a blackout, or sell back to your utility when the grid needs more power.
The subsidy has no limits, so if you spend $35,000 on solar panels and battery storage, including labor, you’ll be eligible for the full 30% refund, or $10,500. The credit can also be rolled over, so if your tax liability that year is only $5,000, you’ll be able to claim more of it the following year, and continue doing so until you’ve received the full value.
Geothermal heating systems are also covered under this credit. (Geothermal heat pumps work similarly to regular heat pumps, but they use the ground as a source and sink for heat, rather than the ambient air.)
Here’s what we know right now. The IRA funded two rebate programs. One, known as the Home Energy Performance-Based Whole House Rebates, will provide discounts to homeowners and landlords based on the amount of energy a home upgrade is predicted to save.
Congress did not specify which energy-saving measures qualify — that’s something state energy offices will decide when they design their programs. But it did cap the total amount each household could receive, based on income. For example, if your household earns under 80% of the area median income, and you make improvements that cut your energy use by 35%, you’ll be eligible for up to $8,000. If your household earns more than that, you can get up to $4,000.
There’s also the High-Efficiency Electric Home Rebate Program, which will provide discounts on specific electric appliances like heat pumps, an induction stove, and an electric clothes dryer, as well as a new electrical panel and wiring. Individual households can get up to $14,000 in discounts under this program, although there are caps on how much is available for each piece of equipment. This money will only be available to low- and moderate-income households, or those earning under 150% of the area median income.
Renters with a household income below 150% of the area median income qualify for rebates on appliances that they should be able to install without permission from their landlords, and that they can take with them if they move. For example, portable appliances like tabletop induction burners, clothes dryers, and window-unit heat pumps are all eligible for rebates.
It’s also worth noting that there is a lot of funding available for multifamily building owners. If you have a good relationship with your landlord, you might want to talk to them about the opportunity to make lasting investments in their property. Under the performance-based rebates program, apartment building owners can get up to $400,000 for energy efficiency projects.
For the most part, yes. But the calculus gets tricky when it comes to heat pumps.
Experts generally agree that no matter where you live, switching from an oil or propane-burning heating system or electric resistance heaters to heat pumps will lower your energy bills. Not so if you’re switching over from natural gas.
Electric heat pumps are three to four times more efficient than natural gas heating systems, but electricity is so much more expensive than gas in some parts of the country that switching from gas to a heat pump can increase your overall bills a bit. Especially if you also electrify your water heater, stove, and clothes dryer.
That being said, Rewiring America estimates that switching from gas to a heat pump will lower bills for about 60% of households. Many utilities offer tools that will help you calculate your bills if you make the switch.
The good news is that all the measures I’ve discussed in this article are expected to cut carbon emissions and pollution, even if most of your region’s electricity still comes from fossil fuels. For some, that might be worth the monthly premium.
Tax Credit #1 offers 30% off the cost of energy audits, windows, doors, insulation, air sealing, heat pumps, electrical panels, with a $3200-per-year allowance and individual item limits.
Tax Credit #2 offers 30% off the cost of solar panels, solar water heaters, batteries, and geothermal heating systems.
Rebate Program #1 will offer discounts on whole-home efficiency upgrades depending on how much they reduce your energy use, with an $8,000 cap for lower-income families and a $4,000 cap for everyone else.
Rebate Program #2 is only for low- and moderate- income households, and will offer discounts on specific electric appliances, with a $14,000 cap.
Read more about the Inflation Reduction Act:
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Fossil fuels are the real October surprise.
This is Heatmap Daily, an evening news digest written by our executive editor. Subscribe here.
At this point, the real October surprise may be the lack of one — because little seems set to change in the U.S. energy economy between now and the midterm elections on November 3.
Inflation certainly isn’t budging. Prices rose 3.7% over the past year, and 0.6% in September alone, according to today’s new government inflation report. That reading was hot — a tenth of a percent above what economists expected.
Surging gasoline and especially diesel fuel prices were to blame. Gasoline prices rose 9.1% last month, which pushed up prices above the economy: Transportation services, a category that includes airfare and Uber rides, increased by 0.6%, while food prices rose by 0.6%. (Read my colleague Matthew Zeitlin on how rising diesel costs can jack up food prices.) Staggeringly, fuel oil prices rose 15.3% — an eye-popping reading for a report where figures are usually in the tenth of a percent.
President Trump seems to be running out of time to repair the U.S. energy economy before Americans elect the last Congress of his presidency. His last-minute deal to free up 2.25 millions barrels of oil from Russia this month — with another 11 million or so to come afterward — seems unlikely to lower diesel prices, given that it represents only a few days of U.S. demand. (The deal has already succeeded in undermining Ukraine, however, and led six Republican senators to rebuke him this week.) Meanwhile, Election Day is in 20 days, and Americans are already voting in 20 states.
This is not how the Trump administration was supposed to play out — at least not according to its proponents. Trump in 2024 ran on taming the energy inflation that had plagued President Biden’s last two years in office. He vowed to “drill, baby, drill” and end Biden’s ambitious climate policies, which he called a “Green New Scam.” He even promised to do the bidding of oil company CEOs if they only steered $1 billion to his campaign.
This flagrant offer of quid pro quo may have mortified some in the industry, but it was coherent with the rest of Trump’s pitch: For more than a decade, he has essentially argued that only by surrendering to the fossil fuel industry, by giving oil and gas companies as much regulatory relief as they can stand, can voters finally escape high energy prices. Trump, of course, cemented this pitch in a typically over-the-top and ill-considered proposal, pledging to cut energy prices in half by 2026 or so. That was never going to happen, and its failure to happen has blown up for the president. But the underlying idea was consistent.
The Trump administration has spent the past two years executing this energy agenda. It repealed large swaths of the Inflation Reduction Act, ending incentives to build new solar and wind farms and terminating consumer-side subsidies for electric vehicles. It rolled back fines and rules restricting wasteful methane pollution. It has effectively eliminated fuel efficiency standards for cars and trucks. And it has declared an extralegal war on the wind industry.
And what has happened? Prices have gone up anyway. Gasoline and diesel are more expensive on an inflation-adjusted basis than they were on the day Trump took office. Now, you might argue that this surge is unrelated to the underlying policy, and that gasoline and diesel prices have surged because of the fallout from Trump’s war in Iran — not his domestic energy policy.
But the Iran crisis reveals the problem that Trump would have faced in any event: Oil prices are set on the global market, and neither the domestic oil industry nor the federal government possess the capacity to swing America’s production or consumption enough to affect those prices. Trump’s presidency, in other words, would always have been held hostage by the global energy markets — just as Biden’s was before him.
There is a deeper lesson here: The fossil fuel industry cannot guarantee low prices for consumers in the enduring way that Trump has promised — even if you give it all the regulatory relief that it demands. Nor can the oil, gasoline, and diesel markets deliver the deep energy security or economic stability that American policymakers want — or that voters desire. Trump’s war on Iran has continually been undermined by the American economy’s exposure to crude oil prices; the president is now compromising Ukraine’s defense in order to secure a dubiously small amount of crude. Fossil fuels remain America’s soft underbelly. Policymakers will keep getting poked until the country diversifies its energy system.
Even the smallest wave, tidal, and river-current projects are currently licensed as if they were 1,000-megawatt dams.
Tucked inside the Senate’s ambitious new permitting bill, the Bipartisan American Affordability and Jobs Act, is a major win for an energy technology that often flies under the radar: marine power. Small-scale wave, tidal, and river-current projects could help power everything from remote communities and military installations to ocean sensors and coastal desalination systems — at least in theory.
Drawing largely from the bipartisan FLOWS Act, introduced in the Senate last December but never brought to a floor vote, BAAJA aims to streamline the licensing pathway for so-called micro hydrokinetic projects, which harness moving water without dams or reservoirs and have a capacity of 5 megawatts or less. The bill would give the Federal Energy Regulatory Commission one year to act on commercial license applications for these projects, while exempting them from full review under the National Environmental Policy Act. It would also allow FERC to issue 10- to 20-year licenses, giving projects a pathway to long-term commercial operation, as opposed to relying on pilot licenses designed for temporary testing.
The bill wouldn’t eliminate environmental oversight altogether. Small-scale marine energy projects would still undergo basic environmental screenings as a part of FERC licensing, and would still require state and local permits, which can trigger their own environmental reviews. They’d also remain subject to the Endangered Species Act and the Clean Water Act — though the bill would expedite reviews under both of those laws, too. On the whole, the reforms are intended to give developers and investors alike a quicker, more predictable timeline.
“Taking a 1-megawatt marine energy project and trying to license it like it’s a 1,000-megawatt conventional dam just wasn’t working. It was apples to oranges,” Matthew Allen, senior director of legislative affairs at the National Hydropower Association, told me. “Recognizing that it deserves its own process could be a tremendous market signal for the technology.”
After all, this tech certainly doesn’t look like large-scale hydropower, where colossal dams unleash thousands of tons of water per second that rush through electricity-generating turbines to the river below. Such gargantuan infrastructure projects typically require favorable geography — think big rivers running through steep, mountainous terrain, where a dam can create a sharp drop in elevation. And with most of the best sites in the U.S. already developed, the country is unlikely to build many new greenfield hydro projects anytime soon.
But less-developed marine energy technologies have barely scratched the surface of their potential. Some look like large buoys, bobbing with the ocean swells and converting that motion into electricity. Others use turbines anchored to the seafloor or riverbed, spinning as tides ebb and flow or river currents rush past. While these devices generate essentially zero power for the grid today, in theory the resource is enormous: The National Renewable Energy Laboratory estimates that wave, tidal, and river-current projects have the technical potential to generate a staggering 2,300 terawatt-hours of electricity annually — more than half of the country’s total electricity generation last year. Wave energy alone accounts for about 60% of that number.
Of course, technical potential is a long way from practical reality. Economic constraints, environmental regulations, competing water uses, and public acceptance could limit uptake of these technologies. NREL suggests that we would be lucky to eventually tap even 10% of marine energy’s potential. Meanwhile, most of the tech remains in the pilot or demonstration stage in the U.S. — which is exactly why expediting permitting for small-scale projects stands to have significant impact.
“Marine energy is so new and still so novel that a 5-megawatt device, it doesn’t even exist right now,” Jennifer Garson, former director of the Water Power Technologies Office during the Biden administration, told me. “So you’re still talking about a good amount of headroom for being able to deploy smaller-scale marine energy devices in rivers and nearshore.”
Early deployments have largely served remote or island communities. In the 70-person Alaska Native village of Igiugig, for example, Ocean Renewable Power Company installed two 35-kilowatt turbine systems on a local riverbed, designed to supply nearly half the village’s power and thus reduce reliance on expensive diesel generators. While the project’s pilot license expires in three years, the permitting bill could offer a pathway to continued power generation.
The lack of a commercial licensing pathway has already led to the demise of one promising project, National Hydropower Association senior program manager Kelly Rogers told me. Verdant Power’s tidal energy pilot in New York City’s East River — the first project of its type to receive a license in the U.S. — officially shuttered in 2021 when said pilot license expired. By then, its turbines had delivered over 312 megawatt-hours of total electricity to the grid, harnessing the tides as they flowed in and out of the saltwater channel.
Other companies in this space include wave energy startups Oscilla Power and CalWave, which make surface-floating and submerged wave energy converters, respectively, with the goal of selling to utility customers and remote communities alike. C-Power, another early-stage wave energy company, is focused on powering off-grid equipment like ocean sensors. And while all have received at least some venture backing, a significant portion of their funding comes from Department of Energy grants.
In 2022, all three received DOE funding to trial their tech at PacWave, an Oregon-based facility that’s the first grid-connected wave energy test site in the continental U.S. Backed by the DOE, the facility secured all its necessary state and federal approvals in advance so that companies working there could largely bypass the permitting process and get their tech straight into the water. But getting there, Garson told me, involved an arduous 15 years of negotiations among the DOE, the Bureau of Ocean Energy Management, and state and local authorities before the facility could open for testing this August.
The permitting bill can only do so much to accelerate a permitting process like this, Garson explained. Even with a faster FERC licensing process, all projects in federal waters — generally those more than 3 nautical miles from shore — will still need a separate lease from BOEM, a complex process that the bill’s new permitting pathway wouldn’t replace. “One of the complexities of anything that you do with water is you just have so many split jurisdictional challenges and questions,” she told me.
It’s also telling that as of yet, there are no wave energy devices in PacWave’s waters, as the Trump administration’s federal funding freeze has scrambled the plans of some of the marine energy developers who’d originally intended to test there. Oregon startup AquaHarmonics, for example, was on track to deploy its wave energy converter at PacWave but had to shut down last year after the Trump administration withheld its previously allocated grant money.
“A lot of the device deployments, particularly in the United States, have been contingent on or reliant on federal funding,” Garson told me. “You’re dealing with still such early-stage R&D that it really points to a necessity for the federal government to be in this space”
But while the federal budget for emerging marine energy technologies has generally grown year over year, Garson said relatively little of that money is actually reaching developers. When she was still at the DOE, for example, the Water Power Technologies Office launched a funding solicitation offering up to $112.5 million in total for wave energy companies to test their devices at sea, including at PacWave. But while the DOE was supposed to announce the winners last year, Garson said it has yet to do so — and it’s disbursed no funding, either.
“That’s a long time for a lot of these companies to sit and wait for any funding to even be available,” she told me. CalWave, at least, still plans to hook its system up at PacWave, as the startup’s CEO, Marcus Lehmann, told me the company is “now in the construction phase of installing the first grid-connected system” and that it plans to launch at PacWave sometime in 2027 or 2028.
He sees the permitting bill as “really critical” in helping early-stage projects “get online faster, and just to prove it out on a community level or a microgrid level” before scaling up to larger installations and device arrays that would likely exceed the 5-megawatt threshold.
“Regulatory certainty, particularly when you’re dealing with capital-tight startups — great. Anything that makes their lives easier, I am all for,” Garson told me, calling the existing permitting structure for marine energy “byzantine.” But she doesn’t think that if the bill passes we’ll suddenly see a slew of wave, tidal, and river-current projects coming online. “You’re still talking about relatively small outputs of power until we reach more [technological] maturity.”
But it could certainly be a first step toward recognizing the potential of water power technologies beyond conventional hydropower — and giving them a place in the broader clean energy conversation. “This is a meaningful amount of power to a lot of people. We just tend to get so lost in the gigawatt conversation,” Garson told me.
And while developers do measure these projects in kilowatts and megawatts for now, one day they too could help move the needle at the gigawatt level. As Garson put it, “If we can figure out how to unlock the ocean — power for everybody, everywhere.”
On methane emissions, renewables’ costs, and Poland’s atomic ambition
Current conditions: Hurricane Simon is lingering off Mexico’s coast as a new tropical depression that could form into a powerful storm begins gathering strength • Iceland has issued an orange-level warning — the notch just below the most severe — across the whole country ahead of an intense storm that could bring vicious winds and snow • The mountain areas surrounding Los Angeles are on red alert for wildfires throughout the rest of the week.
Over Labor Day weekend, I found myself on the upper deck of the ferry to Block Island, a rustic little vacation enclave between Rhode Island and New York’s Long Island, marveling at a seemingly endless horizon of spinning wind turbines. Revolution Wind, Orsted’s first big chunk of the Northeast’s offshore wind buildout, was, as its name implied, an act of defiance. The Trump administration had tried for months to kill the project, which was nearly finished when President Donald Trump returned to office last year. But the Danish energy giant won one battle after another in court, and ultimately brought the 704-megawatt turbine array online. Its completion, however, isn’t the end of the fight.
On Friday, the Department of Justice asked a federal court to rescind the Department of the Interior’s approval of a construction and operation plan for Revolution Wind. Citing a regulatory filing, Bloomberg broke news yesterday that the Interior Department wants to reconsider whether the permit complies with federal law. In response, my colleague Robinson Meyer asked last night whether Trump was “trying to blow up the permitting deal,” which includes a whole section on project certainty. (See my colleague Jael Holzman’s reporting on the bill for more.) White House energy advisor Jarrod Agen appeared to suggest the legal move was a negotiating tactic, calling on “the media” to “stop their attempts to blow up a GREAT deal for the American people.” In a post on X, he said, “This is an old lawsuit brought by the local community—who had serious concerns about this project—against the Biden Administration! The White House maintains support for PERMITTING REFORM! We look forward to the Senate voting on this historic legislation.” In a joint statement Senators Sheldon Whitehouse of Rhode Island and Martin Heinrich of New Mexico, the chief Democratic negotiators of the permitting deal, said “the administration needs to start showing good faith progress on wind permits.”
Of the 1,583 executive orders presidents have issued since 1993, 22 explicitly mention coal. More than a third of those bore Trump’s signature. That’s according to a new analysis by the Financial Times, whose reporting found that lobbying by the coal industry has significantly increased in Trump’s second term. “When we would meet with the Biden administration they were like, ‘Let’s just keep that coal in the ground,’” Michelle Bloodworth, chief executive at trade association America’s Power, told the newspaper. “It’s been just amazing, unbelievable to have President Trump and the administration talk so publicly about the importance of coal.”
Meanwhile, there’s an optimistic climate case for fossil fuel that has driven the shift away from coal and reducing America’s emissions. The problem with natural gas has always been that, despite producing less carbon when burned, the drilling and transportation of the fuel leaks methane, a powerful greenhouse gas that stays in the atmosphere for less time but traps more heat throughout those decades. But methane emissions from the U.S. oil and gas sector are remaining steady despite surging production, according to new research by Johns Hopkins University. The study, published yesterday in the peer-reviewed journal Communications Earth & Environment, highlights a big reason: “Companies have built more infrastructure needed to better capture methane — a vital component of natural gas — and transport it for sale as a fuel, providing a financial incentive to limit the amount escaping into the atmosphere.” That’s a double-edged sword, the paper’s author said. “The good news is that emissions have not markedly increased, as many scientists feared would happen after an enormous increase in natural gas production in the decades following the hydraulic fracturing boom,” Scot Miller, an associate professor of environmental health and engineering at Johns Hopkins University who studies greenhouse gases, said in a statement. “The bad news is that oil and gas production is still a large percentage of U.S. methane emissions, and we do not find any evidence that a flurry of federal legislation had an impact on emissions.”

Wind and solar is cheap to build, and even cheaper to operate. But data suggests “there is no meaningful relationship between wind and solar deployment” and lower wholesale electricity prices, according to a new analysis from the consultancy BloombergNEF. “This is also the case when considering all renewable generation, and renewable-plus-nuclear power.” That’s because, in many markets, renewables bid at or below zero, and are thus tapped first. As a result, fossil fuels set the marginal price during the hours when they’re in demand as a dispatchable resource when the sun isn’t shining or the wind isn’t blowing. On average, fossil fuels such as gas or coal set the price in Europe roughly 58% of the time in 2021, despite a declining share of generation. In the United Kingdom, it was around 90% in the early 2020s, but has since shrunk to 60%. In PJM Interconnection, the second-largest U.S. grid system, natural gas set the marginal price 60% of hours last year. A big problem is the high rate at which renewable power plants are forced to reduce output below maximum levels to keep from overloading the grid. Across 27 markets worldwide, BNEF found that the average rate at which wind and solar are curtailed was 10.5% last year. “Indeed, more wind and solar deployment may increase other cost inputs for retail prices unless other fundraising mechanisms are used,” the report warned. “For example, renewables integration is a key driver of grid expansion and reinforcement, for which network charges in consumer bills have been a crucial source of funding in many markets.”
So, when will wind and solar actually start reducing bills? It depends on where you’re talking about. Over the next decade, Germany’s prices are set to fall by 20% below the 2025 average. Britain’s offshore wind and solar buildout are expected to reduce prices by 26% over that same period between now and 2035. Spain, on the other hand, is forecast to see steady power prices over the next few years followed by an increase as its nuclear plants come offline. In the U.S., prices in PJM and the Electric Reliability Council of Texas are set to soar “partly due to the phaseout of wind and solar tax credits” and “delays to new gas-fired capacity and transmission build.” The Texas grid in particular could see prices soar by 160% over 2025 levels by 2035. But the Midcontinent Independent System Operator, the nation’s largest grid spanning the Midwest, and New York’s statewide grid are poised for “a gradual decline from 2026 driven by steady renewable additions, lowering the need for thermal generation.”
Sign up to receive Heatmap AM in your inbox every morning:
The Department of Energy is pumping $581 million into upgrading the Tennessee Valley Authority’s grid system. The agency said Tuesday the funding would support 84 transmission and distribution projects across eight states in the federally owned utility’s territory, adding about 2.5 gigawatts of capacity. While $331 million will go to cost-share programs that require the TVA and local utilities to kick in funding, another $250 million will come as direct federal funding. “America’s electric grid cannot become a roadblock to economic growth,” Katie Jereza, the assistant energy secretary of the Office of Electricity, said in a statement.
When I visited the site where Poland plans to build its first nuclear power station with a trio of America’s flagship reactors, Westinghouse AP1000s, the area was little more than a cleared portion of a rural field on the Baltic Sea, where crews were conducting seismic tests. But as I told you last week, Poland cemented its plans by approving the purchase of long lead-time items. All along, the country had planned to build at least one more atomic power station. At first, the second plant was supposed to be financed with private capital and use South Korean technology. But those plans have largely fallen to the wayside in recent years.
Now the same state-owned firm behind the AP1000 facility has officially committed to building a second plant. The U.S., France, and Canada have all begun bidding to build the No. 2 facility, according to World Nuclear News.
Last month, I told you that the AI energy software provider Verse had tripled that amount of power capacity under its control. Now, I can reveal exclusively for this newsletter, the company is out with a new calculator that shows the potential impact of the data center buildout on Texas ratepayers. Without new power supply, data centers would add $624 per year to the average household’s bills, Verse’s calculations found. But requiring data centers to build their own power would reduce that increase to $35 per year. But data centers that respond to grid demand with flexibility, ramping down when supply when is lower, could actually reduce households' electricity bills by $223 per year. You can play with the calculator here for yourself.