How Much Have Electricity Prices Increased in 2025?

With air conditioners cranking in the summer heat, most Americans are opening (or about to open) their largest electricity bills of the year–and many are in for an unpleasant surprise.

Exactly how much have electricity prices increased so far in 2025? In this article, we’ll compare this year’s rate hikes to previous years and other essential items that are getting more expensive.

 

 

How Much Have Electricity Prices Increased in 2025?

The average U.S. electric utility rate increased 1.52 cents per kilowatt-hour from January to May 2025–a 9.5% increase in just 5 months–according to the U.S. Energy Information Administration. This increase amounts to nearly $14 more per month for using the same amount of electricity.

 

Month	Monthly Electricity Usage	Electricity Rate	Cost
January 2025	900 kWh	.1595	$143.55
May 2025	900 kWh	.1747	$157.23

 

Although it is typical for utility rates to rise in the summer and fall in the winter, the nearly 10% increase in the first 5 months of 2025 is substantially higher than in previous years.

How much have electricity prices increased in each state in 2025?

From January to May 2025, electricity prices increased the most in North Dakota, with the average residential rate nearly 3 cents per kWh–a 31% increase in just 5 months!

Every state except Massachusetts, Nevada, and Rhode Island has experienced rising electricity prices in 2025. The map below shows where electricity rates are rising fastest in 2025.

 

Are electricity prices rising faster than inflation?

Yes, electricity prices increased faster than every item except utility gas rates on the BLS Consumer Price Index in the 12 months ending in July 2025. Electricity rates increased 5.5% year over year, nearly double the rate of inflation for all items.

 

Consumer Price Index Item	% change in 12-months ending July 2025
All Items	2.7
Food	2.9
Gasoline	-9.5
Utility Electricity	5.5
All items less food and energy	3.1

 

Unlike the highly visible prices for gas and groceries, electricity prices can be hard for consumers to track and often go unnoticed until a surprisingly large utility bill arrives. Fortunately, homeowners can take control of their energy costs–without sacrificing the modern comforts of air conditioning, EV charging, and hot water–by powering their home with solar.

 

 

Why Have Electricity Prices Gone Up So Much?

Electricity rates are rising faster and faster due to an ongoing (and worsening) imbalance in supply and demand. Some of the key factors include:

• Fast-rising demand from power-hungry AI data centers, electric vehicles, and air conditioning.
• Expensive upgrades to modernize an aging and vulnerable power grid.
• Rising material costs due to supply chain tangles, inflation, and tariffs.

Unfortunately, electricity prices are forecasted to continue rising through the 2020’s as utilities spend money to expand and repair the grid and pass the bill onto their customers. Prices are expected to rise even faster with the One Big Beautiful Bill slowing the deployment of quick and cost-effective renewable energy sources.

Related: Why Electricity Costs Are Rising in 2025 and Where They Are Rising Fastest

 

The Bottom Line

Electricity prices are rising much faster than normal in 2025, and homeowners in nearly every state are paying more to stay cool through the summer heat. Utility rates are forecasted to continue climbing throughout the decade due to a perfect storm of rising demand, expensive grid repairs, and slowing renewable energy deployment.

But you can take control. With solar, you can lock in a low, predictable rate for electricity produced on your roof. Connect with a solar.com Energy Advisor to get custom proposals from vetted local installers.