Electricity is Deregulated in Parts of Texas Lagging in Solar Energy

Economics make solar a tough sell in Texas.
Economics make solar a tough sell in Texas.

By Holbet Janson, TCCEA

The Dallas/Fort Worth area trails other parts of Texas substantially in solar power according to a report released in February by the Environment Texas Research and Policy Center.  Oncor, the utility that serves North Texas, including the DFW area, reports solar installations of 9.89 megawatts.  This is a distant third to Austin Energy’s 41.3 megawatts and the 52.6 megawatts reported by CPS Energy who serves the San Antonio area.

Combined, Austin and San Antonio account for 85 percent of the state’s photovoltaic capacity.  According to the report, San Antonio and Austin’s “strong policies” encourage solar power both at the utility scale and individual rooftop scale.

El Paso would also rank on-par with Austin and San Antonio when factoring in the solar-powered electricity the city imports from New Mexico. The cross-state El Paso Electric, which provides power to the El Paso area, is bound by strong state-level renewable energy mandates in New Mexico.

The utilities that provide most of the electricity to the Austin and San Antonio areas are city owned.  Most electricity users in those areas are not able to select their electricity providers. By contrast, Oncor serves the “Power to Choose” region of north Texas where consumers are free to use a retail electric provider of their choice. Most of the state’s electricity users reside in deregulated parts of the state. The lack of solar energy utilization in these areas is due in, no small part, to competition from cheaper sources of energy; specifically natural gas.

Federal subsidies and state level renewable energy mandates have helped solar energy in Texas somewhat.  But neither is enough to overcome the economic realities of energy production in the largely deregulated state. Texas electricity rates are driven by the price of natural gas. Right now, natural gas is cheap. This has driven down the price of wholesale electricity, making the economic case for solar much tougher. Although Texas has the largest capacity to generate solar energy among the U.S. states due to its combination of sunny weather and expansive land, the state ranks far lower in actual solar production.

There are several bills filed in the Texas Legislature aimed at expanding renewable energy in Texas; in particular solar.  The group Environment Texas noted the following in the press release that accompanied their report on solar energy in Texas:

  • HB 1094 (Keffer) and SB 385 (Carona) which would update Texas’ Property-Assessed Clean Energy (PACE) financing law to enable lenders to offer commercial and residential property owners a secure, long-term financing option for solar PV systems and other energy efficiency and water conservation improvements.
  • HB 723 (Anchia) would require the installation of 1500 megawatts of solar and other sources of renewable energy by the year 2022
  • HB 303 (Rodriguez) would require 35 percent of Texas’ electricity come from renewable sources by 2020, including at least 2 percent from solar energy
  • SB 304 (Rodriguez) would require homebuilders offer solar energy as a standard option to their customers
  • SB 305 (Rodriguez) would exempt solar installations from the state sales tax

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3 responses

  1. You should have credited El Paso Times for the part of your report in which you say El Paso Electric would be on par with San Antonio and Austin if its solar power from New Mexico were included. The Environment Texas report said nothing about El Paso Electric’s New Mexico solar. You took that from my story in the El Paso Times, which is fine, but you really should credit other sources when you use them.

    1. Hi Vic,

      My sincere apologies. We always try to give credit where credit is due. Thanks for bringing this to our attention. Please send over a link and we’d be happy to update the article and give you and your publication full credit.


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