How Solar Energy in Texas is Changing

Dec 1, 2020 09:53 AM ET

A renewable energy boom has revolutionized the once home of US oil and gas and turned the state of Texas Green. We look at the remarkable rise of solar power in Texas and explore the factors that have brought this turning point about. 

If there’s one natural resource the state of Texas has always had, it’s a heck of a lot of sun. For decades, it was what lay beneath the ground that made the state so attractive to energy firms, but now it’s the year-round sun that has turned Texas into one of the country’s leading solar power producers. 

According to a report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie, Texas has risen from 9th to 5th in the national ranking of solar electricity capacities over the last year. It has increased its capacity by more than 60% in 2019 alone, adding more than 13 billion watts of power and taking 2nd spot for the total amount of new solar projects installed.

How energy production in Texas has changed

Just a decade or so ago, you would have been forgiven for thinking that the Great State of Texas had oil running through its veins. However, based on the state’s long-term renewable goals and the pace with which it’s reaching them, all that has started to change. 

In February this year, a solar farm was completed in Andrews County. It will generate 100 megawatts of solar power of which all is serving local load, is estimated the project will inject $20 million in property tax revenue into the county during the life of the project, and will reduce the CO2 emissions of more than 19,559 homes’ electricity use for the first year. This is indicative of the boom in utility-scale solar projects that we’re seeing in the Permian Basin specifically, but also right across the state.

According to the Energy Information Administration, the solar projects in the area account for a quarter of all of the new industrial-scale solar capacity being installed across the US this year. What’s perhaps most surprising is that activity has been occurring right in the traditional heartland of the US shale oil industry. Having been weakened by the coronavirus crisis and an ongoing price war between Saudi Arabia and Russia, many of the state’s coal-fired power plants are now closing, with solar projects popping up in their place.     

Why are Texans increasingly switching to solar? 

Such a dramatic switch to solar energy in Texas would not be taking place if it wasn’t supported by customer demand. Currently, natural gas still accounts for more than 40% of the state’s total energy use, wind power accounts for 20% and solar just 2%. So, for residents and corporations that are still not ready to abandon fossil fuels, there’s certainly no requirement to adopt renewables overnight. However, there is a growing list of benefits for those who are willing to make the change. 

  • Make savings over the long-term - Solar is still considered to be quite an expensive form of energy when compared to non-renewables, with considerable costs upfront. However, over the lifetime of solar panels, the average homeowner could stand to save between $10,000 to $30,000.

  • The upfront investment is tax-deductible - In 2020, those that decide to convert their Texan homes or businesses to solar energy could be eligible for a tax credit of 26% according to SEIA. That can help to make the upfront cost more manageable. 

  • The cost of solar has plummeted - The cost of an average utility-scale solar project, as mentioned in the Financial Times, has plummeted from $3.53 per installed watt in 2010 to just $0.80 last year. That makes it increasingly attractive to firms with long-term investment goals.

  • There are substantial green benefits for businesses - Over the last few months, corporate brands such as McDonald’s, Google and Wells Fargo have signed long-term deals to buy power from Texas solar plants to seize on falling prices and improve their environmental image.

  • Individuals want to ‘do their bit’ to fight climate change - More and more Texans are waking up to the perils of climate change and in many cases, experiencing them first hand. They increasingly want to reduce their reliance on fossil fuels and are choosing to invest in renewables. 

Texas to be a leader in the solar market 

Given its politics, Texas’s position as a leader in the solar market is surprising. However, with cheap land and labor and reduced regulation, it’s much easier to build projects and get permission to sell power on the grid than in rival sunshine states such as California. With such a sunny outlook for solar providers, the position of Texas as a leader in renewables does not look set to change.  

Despite the dramatic increase in solar capacity over the last year, we should not expect to see homes adorned with solar panels all over the state just yet. However, it is still a marked move in the right direction for those of us who care about emissions. As investment in solar energy increases, prices will fall to such a level that even those who don’t believe in climate change will switch to solar purely for economic reasons, and that will be the start of an even more significant switch. 


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