Across Minnesota and the nation, electricity rates are climbing faster than inflation, and there’s no sign of that trend slowing down. Recent policy changes, combined with rising energy demand and stalled infrastructure projects, are setting the stage for higher bills for everyone, from homeowners to large commercial energy users.
Why Rates Are Increasing:
Several factors are driving utility costs upward:
- Strain on the Grid: Electricity demand is growing quickly, fueled by manufacturing, data centers, and electric vehicles. Consulting firm ICF projects a 25% increase in electrical load by 2030, with some scenarios pointing to up to a 40% jump in rates. Utilities made long term plans to address increased needs by adding new power generation and making costly infrastructure upgrades to cover these needs. To keep pace, the U.S. will need to add about 80 gigawatts of new generation capacity each year through 2045, roughly double the recent pace.
- Canceled and Delayed Energy Projects: The One Big Beautiful Bill (H.R. 1), signed into law on July 4, 2025, cut key solar tax incentives and placed new restrictions on clean energy projects. These changes are projected to cancel or delay hundreds of gigawatts of planned solar, wind, and battery storage projects nationwide. When projects are shelved, utilities face supply and demand challenges, which often lead to higher rates for customers.
- Higher Project Costs: Starting in 2026, new rules require 40% of solar equipment to come from approved suppliers. This will narrow supply chains and increase costs, making it more expensive to bring new generation online. Utilities will pass those costs to ratepayers.
In The News – The latest rate hike updates:
Last Updated November 4, 2025
A new Q3 2025 analysis by nonprofit organization PowerLines shows utility rate increase requests and approvals now total more than $34 billion in the first three quarters of 2025—more than double the $16 billion in requests and approvals over the same period in 2024.
This includes $5.1 billion in requested or approved rate increases in the third quarter of 2025 alone, on top of $29 billion logged in the first six months of the year. These increases will affect the utility bills of nearly 34 million electric and gas customer accounts and are expected to raise monthly expenses for 124 million billpayers nationwide.
New Report Finds Utility Rate Increase Requests and Approvals Doubled in 2025
BlackRock’s $6.2 billion acquisition of Minnesota Power has sparked debate among lawmakers and energy advocates about corporate influence, clean-energy commitments, and consumer impacts. The deal could reshape how Minnesota utilities approach renewables and rate structures in the years ahead.
BlackRock’s Minnesota Power Takeover Splits DFL Coalition as Corporate Giant Seeks Bigger Targets
Xcel Energy has filed a request with the Minnesota Public Utilities Commission to raise residential electricity rates by about 9.6 % in 2025 and another 3.6 % in 2026 — which would equate to roughly a $13/month increase for the average customer by end of 2026.
As of August 2025, rising costs, and increased project prices have placed pressure on Rochester Public Utility’s plans to add new power to their grid. The utility is now considering annual increases of 4% or 6% until 2030 to successfully complete its projects. These rate hikes would amount to either 22 or 34% rate increases by 2030.
The International Renewable Energy Agency found that the world’s lowest-cost sources of electricity are onshore wind, solar, and new hydropower. Solar is now 41% cheaper and wind 53% cheaper than the least expensive fossil fuel. Despite this, fossil fuels continue to receive far greater government support. In 2023, global subsidies for fossil fuels reached $620 billion, compared to just $70 billion for renewable energy, according to the United Nations.
UN says booming solar, wind and other green energy hits global tipping point for even lower costs
Losing access to low-cost renewable energy and relying more on natural gas will drive electricity prices higher in Minnesota. As wholesale costs rise, utilities are expected to pass those increases to consumers. Current forecasts show electricity rates could climb 25 to 42 percent for residential, commercial, and industrial customers across the state.
Economic Impacts of the U.S. “One Big Beautiful Bill Act” Energy Provisions on Minnesota
Additional Resources:
EXPLAINED: Clean Energy Provisions in the “One Big Beautiful Bill”
Electricity prices are climbing more than twice as fast as inflation
Solar as a Long-Term Solution:
What if you could offset 50-99% of your bill by creating your own energy? When you install solar, you buy less from the grid, therefore less exposed to climbing energy rates.This generates major savings in the long term.
Investing in solar now offers three key protections:
1. Locking in Incentives Before They Expire: Booking your project in 2025 ensures access to the current 30% tax credit, bonus depreciation for businesses, and Safe Harbor protections.
– For residential clients, the federal 30% solar tax credit (25D) disappears after December 31, 2025.
– For commercial clients, projects that have contracts and down payments in 2025 can still lock in the full 30% credit and other incentives. Safe Harbor deadlines mean waiting could cost thousands in lost benefits.
2. Shielding Yourself from Future Rate Hikes: By generating your own power, you reduce reliance on the grid and limit exposure to escalating utility rates.
3. What This Means for Our Customers: Without these incentives, projects become more expensive to build. That cost impacts not only project owners but also utility rates, and local jobs. If fewer clean energy projects move forward, everyone will ultimately pay more for power.
The Bottom Line:
Delaying a solar investment could mean losing access to today’s incentives and facing higher electricity costs tomorrow. At Cedar Creek Energy, we help our clients navigate these changes, secure their tax credits, and design systems that deliver long-term savings.
Now is the time to act — before incentives disappear and rates climb even higher. Contact us today to start your project and protect your energy future.