Will Electricity Prices Go Down in 2025?
After a rapid increase in utility rates in 2022, many homeowners are feeling the pain of several years of high electricity bills and wondering if utility rates will go down in 2025.
We’ll put it this way: Don’t hold your breath for electricity prices to drop.
While we don’t have a crystal ball, in this article we’ll look at trends, forecasts, and economic forces to get a sense of what to expect from electricity prices in 2025 and beyond.
Will utility electricity prices go down in 2025?
In general, utility electricity prices are expected to continue rising in 2025 — albeit at a lower rate than we experienced in 2022 and 2023. How do we know this? Well, many utilities have proposed rate increases — and decreases — for 2025 and filed for approval by local authorities. We’ve listed some of the notable ones below.
Notable utility rate increases proposed for 2025
| State/Area | Utility | Proposed 2025 rate hike |
| Southern California | Southern California Edison (SCE) | 10.3% |
| California | Pacific Gas & Electric (PG&E) | 1.6% |
| San Diego, CA | San Diego Gas & Electric (SDG&E) | 2.7% |
| Western Washington | Puget Sound Energy (PSE) | 6.74% |
| Massachusetts | Unitil | 23% |
| New York | ConEdison | 1.4% |
| Florida | Duke Energy | 4% |
| Minnesota | Xcel Energy | 9.6% |
The big takeaway from this list is that utility electric rates vary greatly from utility to utility and that annual electricity price increases are the norm — not the exception to the norm. Over the last 20 years, electric utility rates have increased by roughly 3% per year on average. However, in an era of rapidly increasing electricity demand, extreme weather, and aging infrastructure, it’s reasonable to expect utility rates to rise at a faster rate in the future.
What causes electricity prices to increase?
Electricity – at least when it comes from a utility company – is a commodity and is therefore subject to the forces of supply and demand. At the most basic level, electricity prices are rising because demand is outpacing supply.
Electricity demand is increasing from home electrification, electric vehicle charging, and new power-hungry AI data centers coming online. On the supply side, well, there’s a lot going on…
The rapid electricity price increase in 2022 is largely attributed to some combination of:
- Supply chain tangles created during Covid-19 lockdowns
- The Russian war in Ukraine upending the global energy ecosystem
- Profiteering (aka “greedflation”) by major oil companies that supply fuel for power plants
While these are all (hopefully) short-term supply issues, there are serious issues at the core of the electricity supply chain. For example, the central grid system itself is outdated and inefficient, and the cost of trying to upgrade or rebuild grid infrastructure is passed onto utility ratepayers.
As a commodity in a capitalist economy, grid electricity is subject to the same inflationary forces as food, housing, and other types of fuel.
Related reading: What’s the Average Electric Bill in Each State?
When will electricity prices go down?
Given the market forces explained above, and a 45 year trend of rising electricity prices, it’s hard to imagine electricity prices coming down significantly in the near future.
The chart below shows the average electricity price in the US from 1979 to 2024. In that 45-year period, prices have increased at an average annual rate of 2.9% and have only decreased year-over-year nine times.
Historical Electricity Prices Chart
Based on this history, electricity prices may fall year-over-year once or twice every decade, but in the big picture, they will continue climbing at a steady rate. The only question is at what rate will they climb?
Electricity price forecasts: 2025 and beyond
Depending on where you live, residential electricity rates are projected to rise between 15% and 40% by 2030, according to ICF, and could double by 2050. The main cause: We’re using more and more electricity to power AI, industrial manufacturing, transportation, heating, and cooling, and we aren’t building energy infrastructure fast enough to balance supply and demand.
Unfortunately, the ICF rate forecast may end up being lower than reality. In July 2025, President Trump signed the “One Big Beautiful Bill” into law, which removed incentives and made it harder to build wind and solar projects needed to meet rising power demand.
Set a flat rate for your electricity
Even if electricity prices go down in 2025 or the coming years, they are all but guaranteed to continue rising in the long term based on market forces. Home solar allows you to set a flat rate for your electricity and hedge against energy inflation.
Connect with an Energy Advisor to learn more about hedging against energy inflation with solar.
