Why Is Texas Terrible at Producing Solar Power?

CHICAGO - SEPTEMBER 01: Solar photovoltaic panels generate electricity at an Exelon solar power facility on September 1, 2010 in Chicago, Illinois. The 10-megawatt facility located on the city's south side is the largest urban solar installation in the United States. The 32,292 panels can generate more than 14,000 megawatt-hours of electricity per year, enough to meet the annual energy requirements of up to 1,500 homes.
National Journal
Clare Foran Jason Plautz and Patrick Reis
May 15, 2014, 3:41 p.m.

Texas is an en­ergy su­per­power, and not just for fossil fuels. The Lone Star State pro­duces more nat­ur­al gas than any oth­er state, but it also leads the na­tion in wind en­ergy.

It’s also a massive, South­ern, sun-baked state that is so full of the wide-open spaces needed for sol­ar pan­els that it rivals Cali­for­nia for the na­tion’s largest sol­ar-en­ergy po­ten­tial, ac­cord­ing to an En­ergy De­part­ment re­port. Texas, the re­port says, is home to a full 20 per­cent of total U.S. po­ten­tial for con­cen­trated sol­ar power.

Only a tiny per­cent­age of that po­ten­tial, however, has been ex­ploited. Ac­cord­ing to the Sol­ar En­ergy In­dus­tries As­so­ci­ation, Texas has only about 200 mega­watts worth of sol­ar-power pan­els in­stalled. That’s less than is cur­rently fir­ing in New Jer­sey, Mas­sachu­setts, and New York.

So why is Texas’s sol­ar sec­tor flounder­ing when oth­er en­ergy sources, even oth­er fledgling re­new­able-en­ergy sources, are sur­ging? In short, be­cause a con­flu­ence of policy choices and eco­nom­ic forces have stun­ted the state’s sol­ar growth — and few sol­ar ad­voc­ates see hope that the state land­scape will change any­time soon.

“It’s frus­trat­ing be­cause you look and you think, ‘Wow, this could be amaz­ing,’ ” said Car­rie Cul­len Hitt, seni­or vice pres­id­ent of state af­fairs for the Sol­ar En­ergy In­dus­tries As­so­ci­ation. “Be­cause it’s a new mar­ket, you need some eco­nom­ies of scale go­ing in and those states had some policies in place, be they re­bates or tax in­cent­ives. Texas doesn’t have those things “¦ and be­cause of that, they have not had the mar­ket star­tup mech­an­isms in place.”

But any push for such policies has a high hurdle to over­come: the hy­per-par­tis­an­ship of the na­tion’s en­ergy de­bate.

A dec­ade ago, policies sup­port­ing re­new­able en­ergy were largely viewed through the lens of in­vest­ment, and as such had sig­ni­fic­ant state-level suc­cess in at­tract­ing bi­par­tis­an sup­port. Now — after a bloody con­gres­sion­al struggle over the cap-and-trade cli­mate bill — such sup­ports are in­creas­ingly viewed as a polit­ic­al state­ment. In deep-red Texas, there’s little le­gis­lat­ive ap­pet­ite to re­struc­tur­ing the state’s en­ergy policies to find new sup­port for sol­ar.

And so Texas is likely to con­tin­ue for­ward with a leg­al code that, thus far, has failed to sig­ni­fic­antly spur sol­ar in­vest­ment.

Texas is one of 29 states with a re­new­able-en­ergy stand­ard — a goal for get­ting a cer­tain amount of its power from sources like wind, sol­ar, and oth­er fossil-fuel al­tern­at­ives. When the stand­ard was signed in­to law in 1999 it called for 2,000 mega­watts of ad­di­tion­al re­new­able power gen­er­a­tion to be brought on­line with­in a dec­ade. But with­in that stand­ard, there was no spe­cif­ic re­quire­ment that any of those in­stall­a­tions come from sol­ar power. And without that re­quire­ment, de­velopers over­whelm­ingly chose wind en­ergy — which for in­vestors was both more fa­mil­i­ar and, as it fre­quently re­quires lower front-end costs, less risky.

Texas also lacks “net-meter­ing,” a policy that has helped sol­ar flour­ish else­where. Net-meter­ing al­lows res­id­en­tial sol­ar cus­tom­ers to earn full re­tail cred­it for ex­cess elec­tri­city that they sell back to the grid. It’s a policy that’s on the books in 43 states, but doesn’t ex­ist at the state level in Texas. Power pro­viders there have the op­tion to cre­ate sol­ar-power in­cent­ive pro­grams of their own, but few­er than one in 10 has done so, ac­cord­ing to a 2011 re­port from the non­profit con­sumer-ad­vocacy group Pub­lic Cit­izen.

Sol­ar’s main sup­port in Texas comes from a fed­er­al policy. The sol­ar in­vest­ment tax cred­it is a 30 per­cent tax cred­it made avail­able to res­id­en­tial and com­mer­cial sol­ar pro­jects.

To be sure, not all of sol­ar’s Texas woes stem from state-level policies. The en­ergy source has also taken a beat­ing from eco­nom­ic forces. Elec­tri­city is typ­ic­ally dirt cheap in Texas, mak­ing it hard for any power plant to turn a profit, es­pe­cially one with high up-front costs like a sol­ar farm. And the frack­ing boom has stiffened com­pet­i­tion for sol­ar en­ergy as the sup­ply glut and res­ult­ing price dip in fuel prices has made nat­ur­al-gas power plants a more at­tract­ive op­tion.

But ad­voc­ates in­sist that with the right policies, sol­ar has strong po­ten­tial in Texas — and they point to two cit­ies where it has flour­ished: San Ant­o­nio and, to a less­er ex­tent, Aus­tin.

San Ant­o­nio has 90 mega­watts of util­ity-scale sol­ar on­line with an­oth­er 15 mega­watts from dir­ect gen­er­a­tion, and util­ity CPS En­ergy es­tim­ates there’s an­oth­er 385 mega­watts com­ing on­line over the next two to three years. That’s been enough to rank the River City sixth na­tion­wide in sol­ar ca­pa­city, ac­cord­ing to an April re­port from En­vir­on­ment Texas, and has at­trac­ted sol­ar com­pan­ies to set up shop in the city.

Aus­tin, mean­while, has 16 mega­watts on­line.

What sets them apart? Both cit­ies have mu­ni­cip­al util­it­ies that had more free­dom to set in­de­pend­ent re­new­able goals and of­fer re­bates than the de­reg­u­lated mar­kets else­where in the state. Lanny Sinkin, ex­ec­ut­ive dir­ect­or of the non­profit Sol­ar San Ant­o­nio, said the abil­ity of a mu­ni­cip­al util­ity to “look at val­ues bey­ond the bot­tom line” has made city-level ini­ti­at­ives more suc­cess­ful.

And from that, sol­ar ad­voc­ates see hope for broad­er pro­gress.

“We have as­sumed that we had to de­vel­op a strategy that did not rely on state sup­port,” said Lanny Sinkin, the ex­ec­ut­ive dir­ect­or of Sol­ar San Ant­o­nio. “It was just nev­er go­ing to come and de­vel­op the strategy for how to get it. Now I think that with the rap­id ex­pan­sion of sol­ar in Texas, there’s go­ing to be more and more polit­ic­al sup­port.”

And ul­ti­mately, sol­ar’s best hope in Texas likely comes not from policy, but from tech­no­logy. The cost of sol­ar pan­els is fall­ing pre­cip­it­ously, as sci­ent­ists de­vel­op more ef­fi­cient man­u­fac­tur­ing mod­els and cheap­er Chinese mod­els hit the mar­ket. And even for a green en­ergy source in a red state, it’s dif­fi­cult to ar­gue with a lower price tag.

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