Why US Inequality Makes EVs, Solar, & Heat Pumps Fragile – CleanTechnica

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The headline number is startling. The top 10% of American households now account for roughly half of all consumer spending, according to data reported by the Wall Street Journal and Bloomberg in 2025. That has never been true in the modern era. It creates a situation where the economic pulse we take from consumer data is no longer a reflection of the broad population but a reflection of how confident and liquid the affluent are. When wealthy households keep spending on cars, travel, and housing upgrades, the numbers suggest resilience. In reality, the majority of households are stretched and retrenching, with little influence on aggregate data. The economy has become tethered to the fortunes of a small group at the top.

The gap between the average and the median captures the distortion. Census Bureau figures show that real median household income in 2024 was $83,730. The mean remains substantially higher, reflecting the pull of top incomes. Wealth tells a sharper story. The Census reported median household wealth at $176,500 in 2022, while the Federal Reserve’s Distributional Financial Accounts place the average at about $1.06 million. The top 10% control about 67% of all U.S. wealth, while the bottom half hold only 2.5–3%. The affluent can buy new cars, solar arrays, and high-efficiency HVAC without thinking much about payback. Everyone else delays, rents, or goes without.

Electric vehicles are a clear example of how inequality shapes adoption. Kelley Blue Book data show that average transaction prices for new cars were about $49,000 in mid-2025, while the average for EVs was around $56,900. That locks out most median-income households from the new car market altogether. Even with the $7,500 federal tax credit under Section 30D of the Internal Revenue Code, tightened sourcing rules mean that only some models qualify, and many buyers are excluded by income or vehicle price caps. Affluent buyers dominate the market. They are not deterred by tariffs on imported batteries or by shifts in eligibility. They buy Teslas, Rivians, and Lucid sedans because they can. Policymakers and analysts can look at those sales and declare success, but the underlying truth is that EV adoption is highly skewed. Research from the Center for Automotive Research has shown median household incomes of EV buyers exceeding $150,000, far above the national median. If stock markets stumble, affluent demand could fall, and EV sales would drop sharply.

Residential solar follows a similar pattern. Homeownership, access to credit, and upfront capital all align with higher incomes. Lawrence Berkeley National Laboratory has found that the majority of new rooftop solar systems are installed by households in the top two income quintiles. Federal incentives structured as tax credits reinforce that skew because only households with substantial tax liability can claim them fully. The Internal Revenue Service guidance still provides a 30% residential solar tax credit through 2032, but renters and low-income owners remain unable to take advantage. Meanwhile, regulators in several states are reducing export rates for solar households. California’s Net Billing Tariff, implemented in 2023, sharply cut the value of exports, and Arizona moved earlier to a similar structure. Aggregate installation numbers are climbing, but they are climbing on the rooftops of the wealthy. That fuels political backlash, as non-solar households see policy as a subsidy for their richer neighbors.

Heat pumps, essential for decarbonizing building heat, are also concentrated among the affluent. Installed costs for whole-home retrofits typically run from $16,000 to $20,000, with some projects running over $25,000 depending on home size and climate, according to industry estimates compiled by Rewiring America and Consumer Reports. Even with incentives, these costs remain out of reach for many households. The federal 25C tax credit allows up to $2,000 annually for heat pumps, and state-level rebates under the High-Efficiency Electric Home Rebate Act are rolling out unevenly across the country.

Wealthier homeowners are adopting steadily, motivated by efficiency, comfort, and climate values. Their adoption creates a growth curve that looks strong on paper. Yet the reality is that the majority of American homes continue to rely on fossil heating. Without broader access through targeted subsidies, renter programs, or low-cost financing, heat pumps will remain a niche choice for those who can afford the upfront spend.

The Big Beautiful Bill entrenches income and wealth inequality by heavily weighting tax relief toward affluent households while stripping back credits that supported clean energy adoption for the middle class. High earners benefit most from permanent rate cuts, expanded pass-through deductions, and higher estate tax exemptions, which increase their capacity to accumulate wealth and pass it on to future generations. At the same time, the early termination of credits for EVs, residential solar, and heat pumps removes important cost offsets for households with tighter budgets.

The outcome is a fiscal policy that boosts disposable income for the top 10% while making key technologies more expensive for everyone else. Over time, this combination amplifies wealth concentration, accelerates the divergence between average and median outcomes, and leaves the clean energy transition increasingly dependent on affluent buyers.

This creates fragility. When EVs, rooftop solar, and heat pumps are all disproportionately carried by the top 10%, the transition looks more robust than it is. Policymakers who are still driving the transition, state level ones now that the federal government has once again abdicated responsibility, see headline adoption figures that are misleading. The market looks healthy until the affluent pause, and then it is not. An affluent-led transition is vulnerable to financial downturns and politically vulnerable because it excludes most of the population. That is not how you build a durable energy system transformation.

History shows what happens when wealth disparities widen without check. Rome’s late Republic was dominated by elites with vast estates, and resentment boiled over into populism, assassinations, and civil war. France before 1789 had nobles and clergy insulated from taxation while the burden fell on commoners, and the French Revolution swept the system away. The United States’ Gilded Age concentrated fortunes in the hands of a few industrial barons, and the reaction was the Progressive Era, antitrust action, and income taxes. Interwar Europe saw the combination of inequality and depression fuel authoritarian politics. Across time and geography, extreme inequality has either been corrected by reform or shattered by rupture.

Today the United States is at its highest inequality levels since the 1920s. Income gaps are wide, wealth gaps are wider, and mobility across classes is low, and these weaknesses are increasing, not decreasing. That combination is corrosive. Trust in institutions falls, polarization deepens, and populism takes root. An energy transition built on affluent adoption risks becoming politically toxic. If EVs, solar, and heat pumps are branded as toys for the rich, subsidies and policies that support them will face opposition, even in Blue states. Decarbonization will stall. For the transition to be durable, the middle and lower deciles must be able to participate, not just the affluent.

Inequality does not sustain forever. It demands a reckoning, and societies either reform or break. In the context of climate, time is short. The transition must be equitable if it is to succeed. Policies that broaden access, support renters, reduce upfront costs, and deliver real savings to the majority are not just socially fair. They are essential to building a resilient, politically sustainable, and enduring clean energy economy. If the transition remains dependent on the spending habits of the top 10%, it will always be at risk.