As President Biden touted the need to invest in energy efficiency during his State of the Union address, he said his clean energy legislative agenda would cut energy costs for American families an average of $500 a year by combating climate change.
Facts first: This needs context. Biden’s estimate is based on third party analysis that assessed the savings Americans might see by 2030, not immediately.
Biden’s $500 per year figure comes from a recent report done by the nonpartisan research firm Rhodium Group – which analyzed how much greenhouse gas emissions the US could slash by passing major clean energy legislation, putting forth new federal regulations, and having states pass new climate and clean energy bills as well.
Rhodium’s report also looked at how this would impact household energy costs; it stresses that clean energy tax credits would have the biggest impact on potential household savings because they would help bring down the costs of items such as clean electricity and electric vehicles.
“Long-term tax credits, investments in energy efficiency and other factors cushion consumers from price increases associated with new standards and regulations,” the Rhodium report reads. “On a national average basis, households save roughly $500 a year in energy costs in 2030 in our joint action scenario.”
As it notes, Americans wouldn’t expect to see energy costs go down by $500 per year immediately. Rhodium estimates that would happen by the end of the decade, with savings building gradually if Congress passed a major clean energy bill.