Cost cutting was a guiding principle for the “big beautiful bill” that squeaked through the House in May and went to the Senate for review. But modeling by analysts at the nonpartisan think tank Energy Innovation highlights the ways energy provisions in the One Big Beautiful Bill Act could prove expensive for states.

As it now stands, the bill would slow energy deployment and manufacturing over the next 10 years, say the analysts in a new report. The bill proposes taking back unobligated clean energy funds from Inflation Reduction Act programs, eliminating tax credits for clean energy development and manufacturing, and imposing new registration fees for owners of electric and hybrid vehicles.

These changes could mean the loss of 330 gigawatts of new electricity generation capacity between now and 2035 — as much energy as would come from165new Hoover dams. Wind power would be the most affected (see chart). Red states have been the leaders in making energy from wind, with Texas producing more than twice as much as any other.

This loss of capacity is a problem at a time when artificial intelligence alone is expected to increase data center power demand by as much as160 percent by 2030,according to Goldman Sachs. Elimination of clean energy tax credits threatens more than $321 billion in announced private investments in energy and manufacturing. The bill expands oil and gas leasing, but new gas power plants aren’t being built at the same rate as solar and wind, says Megan Mahajan, one of the report authors.

“All the major gas turbine manufacturers have delivery backlogs until at least 2029,” she says. “If you’re thinking about being able to meet rising electricity demand with new sources, it’s really important to get wind and solar online.”

Mahajan and her colleagues also modeled the impact of the bill on jobs. Projects announced on the basis of tax credits face uncertainty. Hundreds of thousands of jobs could be lost each year by removing incentives for clean energy investment, the majority in sectors not directly related to clean energy.

Job losses would vary by state. “Some states have significant investments planned in clean energy technologies like batteries, which are really hit hard by the loss of manufacturing tax credits,” Mahajan says. Again, red states would be among the most affected, including Texas, Florida, North Carolina, Ohio and Indiana.

Solar and wind are the cheapest sources of electricity. Greater dependence on fossil fuels for electricity generation and the higher fossil fuel prices resulting from increased demand would cause household energy costs to increase, Mahajan says. Almost all the states among the 20 where families would see the greatest increases in their energy bills are Republican-led.

In combination, factors including rising household costs, cancellation of announced investments and projects, and job losses could have significant consequences for the country’s GDP. Energy Innovation’s modeling is based on an open source policy simulator that takes a wide range of consequences from the present One Big Beautiful Bill Act into account, including termination of a clean vehicle tax credit and rising costs of fueling vehicles with internal combustion engines.

“If you look cumulatively at the impacts on a national level it will cut national GDP by over a trillion dollars,” Mahajan says. The cumulative GDP loss over the next 10 years will amount to tens of billions in many states (see map).

Republicans have long been opposed to former President Joe Biden’s Inflation Reduction Act. No Republican in the House or Senate voted for it. Estimates of its fiscal costs range from $800 million to more than $1 trillion over a decade, a ripe target in a policy climate focused on cutting expenditures. President Donald Trump’s budget proposal aims to eliminate funding for a “Green New Scam,” referencing “unreliable renewable energy” and other costly technologies that “burden ratepayers and consumers.”

Energy Innovation’s modeling likely understates potential impacts, Mahajan says, using conservative estimates for the demand in electricity growth. It doesn’t encompass the full costs of climate impacts, including health effects, investments never made or ceding leadership in clean energy innovation and export to China. China’s exports of advanced energy technology to developing countries, for example, are already 10 times greater than those from the U.S. and grew by more than 100 percent between 2018 and 2023.

“In a world where we see competitors like China going all in on clean energy, we don’t want to lose the momentum we’ve seen on this front,” Mahajan says.