Trump's Latest Energy Moves: What It Could Mean for Your Wallet

Planning to install solar panels or a heat pump? Thinking about an electric vehicle? President Donald Trump's new energy policies are creating uncertainty around the future of consumer-level clean energy incentives, leaving many of us wondering what it all means for our wallets. 

One of Trump's many executive orders from his first week in office called for "unleashing American energy" and making significant changes to US energy policy. The document made an about-face on many Biden era programs, blocking the landmark Inflation Reduction Act and calling for new fossil fuel pipelines, among other things.

"It is a lot of words, it is not very specific in certain areas," said Louise Bedsworth, executive director at the Center for Law, Energy & the Environment at the University of California, Berkeley.

Since then, the Trump administration has also released an executive order aiming to block state-level climate laws and policies -- a move that is probably illegal, according to Grist.

These messages show a marked departure from the renewable energy push of the Biden era. "It's this ping-pong" in policy priorities, Bedsworth said, which can be very destabilizing to an industry.

These executive orders are actions by the executive branch -- directives from the president to federal agencies. Congress, on the other hand, is responsible for any law that changes existing legislation, such as the Inflation Reduction Act's tax credits. CNET's Jon Reed recently reported that the House of Representatives is threatening to cut key tax incentives for EVs, solar panels, heat pumps and more. House proposals can drastically alter the landscape and future of clean energy tax credits, effectively ending the IRA's 30% tax credit. However, nothing has been written into law as of yet. 

As of now, many of the Biden administration's key programs remain in place because Congress will have to change the law. 

We asked an expert to explain what these executive orders can actually do and how they will affect consumers. 

What do the executive orders say about energy policy?

Many, many things. 

The first of these executive orders, about "unleashing American energy," has a few key elements, according to experts:

• The order aims to "encourage energy exploration and production on Federal lands and waters." Generally, "energy exploration" refers to digging and drilling for fossil fuels.
• It rescinds many of President Joe Biden's executive orders related to climate change.
• It terminates "all activities, programs and operations associated with the American Climate Corps."
• It aims to make permitting for fossil fuel pipelines faster and easier.
• It immediately pauses all federal funds being sent out through the Inflation Reduction Act.

A lot of these measures rely on federal agencies, and in large part, the executive order asked agency heads to come back in 60 or 90 days with an action plan. So it remains to be seen what will actually change within federal agencies, Bedsworth said.

"It's going to be very challenging to track all those pieces and understand, where did we land?" she said.

Leaders at the Environmental Protection Agency and the Department of Energy, for example, are laying out their agendas and taking cues from Trump's executive orders, according to Bedsworth.

The more recent executive order, aimed at states, is shorter. Here are the important points:

• The order is attempting to remove "illegitimate impediments" to the use of "oil, natural gas, coal, hydropower, geothermal, biofuel, critical mineral and nuclear energy resources."

• It singles out states like New York, Vermont and California for climate policies it says "weaken our national security and devastate Americans by driving up energy costs for families coast-to-coast."

• It directs the attorney general and agency heads to review state-level climate laws and make efforts to stop any that they deem contradictory to federal law

Some of these actions also toe the line of executive power, Bedsworth said, which means "a lot of this, we'll end up seeing in the courts."

How much of this can an executive order actually do?

Executive orders, while impactful, are limited in their scope compared with laws passed by Congress. Any sweeping changes to programs or tax credits established by laws like the Inflation Reduction Act would need congressional approval. 

Here's a breakdown of what the energy executive orders can actually accomplish:

Limits of executive orders on energy policy

How Trump's energy changes could affect your wallet

"If nothing else, it creates a lot of uncertainty," Bedsworth said. The proposals in Congress right now add a new layer of complexity. The House proposal suggests that the IRA's 30% tax credit for solar panels and heat pumps could expire at the end of 2025 rather than 2033 as currently scheduled. The $7,500 EV tax credit is also at risk. 

The executive order can pause funds being distributed by the IRA but can't permanently block them without an act of Congress. Plus, many of the incentives for consumers are structured as tax incentives through the IRS, not as direct funding from the government, so they are less likely to be affected.

Consumers right now should still be able to access the IRA rebates and tax credits, according to Bedsworth, but "there remains a lot of uncertainty," she said.

Even if the funding streams remain in place, however, there will likely be less government outreach and education to help consumers access them. "You're ultimately going to see a cooling, at a minimum, in the messaging," Bedsworth said.

None of this stops consumers from buying an EV, for example. "The technology is getting better, the cost is going down, so the ability to own an EV is still there," says Elaina Farnsworth, CEO of SkillFusion, which trains workers to build electric infrastructure.

Will Trump's policies lower your energy bills?

The rhetoric around Trump's efforts to "unleash American energy" often implies that doing so will lead to lower energy prices for you as a consumer. But it's not that simple.

Experts say that the president can do only so much to impact energy rates. While government policy plays a role, it's one of many factors and isn't likely to make a significant impact in a matter of months. "It is a longer-term trend that you would see," Bedsworth said.

In fact, federal energy policy makes a more direct and immediate impact for businesses and manufacturers, according to Gouri Ganbavale, senior consultant, decarbonization and climate action at BSI Consulting.

"Utility pricing for residents is pretty much stable," she said.

Bedsworth echoed this point: "I don't think we're seeing the declines in prices that were claimed to be coming," she said, "and we're really just seeing a promotion of fossil fuels."