Eliminate Energy Mandates and Subsidies

Author: Austin Gae, Policy Analyst

Affordability 101 · Chapter 2: Abundant Energy and Natural Resources

Plymouth Institute for Free Enterprise

Topline

Lawmakers should repeal costly energy subsidies and mandates, which seek to dictate which forms of energy Americans must produce and use.

Background

The energy sector has strong financial incentives to expand supply to meet rising demand as Americans spend over $1 trillion annually on energy. Government energy subsidies are unnecessary to induce companies to produce energy. They simply allow politicians to impose their energy preferences on American businesses and consumers while increasing the federal deficit. Although the One Big Beautiful Bill Act rolled back many energy subsidies in 2025, some remain in place.

Energy mandates are an even more heavy-handed way for politicians to dictate which types of energy Americans produce and use. Renewable portfolio standard require that a specified percentage of electricity must come from renewable sources. Twenty-seven states and the Washington, D.C. have adopted such standards, and 16 of them require renewables to account for more than 50% of their electricity by 2050. These aggressive mandates raise energy costs and reduce grid reliability.

Action Items (Congress and States)

• Congress should repeal all remaining energy subsidies, including the clean hydrogen production credit, clean electricity production credit, clean electricity investment credit, advanced manufacturing production credit, nuclear power production credit, clean fuel production credit, and carbon oxide sequestration credit.
• States should repeal all forms of energy mandates and energy subsidies, including renewable portfolio standards.

How It Would Make Life More Affordable

• Eliminating subsidies and mandates would free energy companies to invest in the most promising projects, ultimately leading to more abundant and efficient energy.
• Eliminating mandates would remove government-imposed costs and translate to lower energy prices.

Related Legislation: Energy Freedom Act (S. 1721, H.R. 3330).

Bottomline

A one-size-fits-all political agenda for energy imposes a heavy cost. Instead, America should build a future with more affordable, reliable energy by letting producers decide how best to invest, innovate, and compete.

This memo is part of Affordability 101, Advancing American Freedom’s playbook of 101 policy solutions to make life more affordable.

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