Utility costs are expected to rise by a whopping $38 billion across the United States by the end of 2025, according to a new report. Experts say the explosive demand for artificial intelligence, electric-powered transportation, and a shortage of transmission lines are to blame.

What's happening?

CBS News detailed a report from the Center for American Progress, a public policy research and advocacy organization, that found that nearly 60 utility providers are planning energy rate hikes that will take effect later this year. Higher electric costs would affect approximately 57 million utility customers, according to the report.

CAP listed several factors driving higher electricity bills, including "increased demand from data centers to climate pressures such as wildfires and extreme heat to policy choices such as tariffs and higher gas exports." Plus, summers are getting hotter because of rising global temperatures, per NPR, prompting people to use more air conditioning — and thus more electricity — to stay cool.

On top of all these reasons for soaring energy rates, the One Big Beautiful Bill Act is making electricity more expensive by phasing out tax credits for clean energy, such as solar and wind power, resulting in slower construction of renewable projects and restricting the supply of affordable power.

"If things keep going like this, [utility bills] are gonna be higher next year," Rob Gramlich, president of Grid Strategies, a power sector consulting firm, told CBS.

In a July congressional hearing, Gramlich explained that "the U.S. is falling far behind global competitors," namely China, in deploying high-voltage transmission lines to carry more electricity to customers. He said that the U.S. has installed just 10% of the capacity that India, Europe, and China have combined.

A 2022 Department of Energy report found that to hit clean energy targets and keep up with rising demand, the U.S. will need to expand national transmission infrastructure by 60% by 2030.

Why are higher electric bills concerning?

As CAP explained, citing data from the Census Bureau, around 77 million households had to reduce or do without necessities, including medicine and food, for at least one or two months in 2024 to pay their electric bills. Some also reported keeping their homes at temperatures that felt "unsafe or unhealthy" to keep costs down, which can be dangerous in heat waves, especially for children, older adults, and those with preexisting medical conditions.

And even for people who can pay for rising electric costs, it still contributes to a higher cost of living, thus creating stress and insecurity for millions.

Rising demand and reduced supply also strain the aging electric grid, increasing the risk of blackouts and localized power outages.

Do you think your energy bills are too high? Always 👍 Usually 🥵 Only in certain months 😓 Never 👎 Click your choice to see results and speak your mind.

What can you do to reduce energy costs?

Thankfully, there is an easy way to lower energy costs in the long run, though it may require a substantial upfront investment. Installing rooftop solar panels is a proven way to save on electricity (or even pay $0 a month) while reducing your home's pollution footprint.

But if you're not ready to shell out thousands of dollars for a home system, you can reap the same benefits by leasing from Palmetto. Through its LightReach program, customers can access all the advantages of solar energy without worrying about maintenance or expensive installation fees — some plans even require no down payment.

If purchasing a solar system sounds like a better fit, EnergySage offers free tools that allow you to compare quotes from qualified installers and find the best deal for your needs. Not sure whether leasing or buying is the right choice? Palmetto has you covered with a comparison of pros and cons so you can feel good about going solar.

Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.