Repealing Tech-Neutral Tax Credits Will Raise Energy Costs for Farmers, Harming Reliability and Affordability in Rural America

The tech-neutral clean electricity tax credits are important tools for farmers and ranchers to reduce costs, gain financial stability, and achieve energy security, especially at a time when America’s farmers and ranchers are already under severe economic strain. New RMI analysis based on CEBA data indicates that a mid-sized dairy farm could see a $10,000 increase in annual electricity costs in 2026 without the tech-neutral clean electricity tax credits.

For rural electric co-ops, the tech-neutral clean electricity tax credits mean a pathway to improve grid reliability and resilience and ensure affordability for consumers. Eliminating the tax credits (or abruptly ending them as in the House’s proposed de facto repeal) would increase costs and derail planned investments to improve longstanding challenges with grid reliability and energy affordability in rural areas, to the detriment of consumers, workers, businesses, and households.

For example, analysis by RMI shows that without the clean electricity tax credits, Wisconsin’s Dairyland Power Cooperative’s planned portfolio of wind, solar, and storage projects would more than double in cost — forcing them to pass on significantly higher electricity rates to member-owners, including farmers and ranchers. That would drive up annual costs by $137 million.

Taking real solutions off the table

The proposed repeal of tech-neutral clean electricity tax credits would take real solutions off the table for rural communities and producers trying to stay afloat. Tech-neutral tax credits like the Investment Tax Credit (ITC) (48E) and Production Tax Credit (PTC) (45Y) have become essential tools helping farmers and ranchers lower their energy bills, diversify their income sources, gain energy independence, and find a financial foothold during times of rising input costs, volatile markets, and aging infrastructure.

Farmers are using the ITC to finance on-farm solar that reduces their operating costs, diversifies their income streams, provides protection from power interruptions, and helps them control one of their most volatile inputs: energy. Farmers can save up to 70 percent on electricity bills by switching to solar power, but without the ITC, solar projects — with steep up-front costs for installation — are unaffordable for farmers who are already operating on razor-thin margins. The ITC helps farmers take steps toward both financial stability and energy security.

Rural electric co-ops are using these tax credits to provide reliable, affordable electricity. As energy demand grows nationwide and outpaces supply, the cost of delivering power will rise sharply, and co-op members and the rural communities they serve will face higher energy costs. More than 900 electric cooperatives serve 42 million people across 48 states, powering over 22 million homes, schools, farms, and businesses and providing electricity for 92 percent of persistent poverty counties across the country, often as the only provider willing to serve the most rural and remote areas. Rural America faces a 33 percent higher energy burden than the rest of the nation. The tax credits are one of rural America’s best tools to achieve meaningful energy cost savings. Repealing them means undermining efforts to foster economic development, especially those driven by co-ops.

Electric co-ops have been planning major investments in new clean energy generation, battery storage, and associated grid infrastructure across the United States since becoming eligible to access these incentives just a few years ago. Clean energy investments are complex, multi-year projects that require long-term planning, financial predictability, and policy stability. Losing access to these tax credits, and the financing arranged with their expected impact included, means many of these projects will be canceled before even breaking ground. Pulling the rug out midstream doesn’t just raise costs, it undermines investor confidence and policy predictability on which American enterprise, energy security, and rural economic growth depend. This would be particularly unfair given that co-ops have only just recently been given the opportunity to make direct use of clean energy tax credits, enabling them to participate more fully in the modern innovation economy.