Solar energy may not be as prominent as wind energy in Texas, having an installed capacity of 589 MW which puts Texas on tenth rank nationally. This can power 63000 homes. Nevertheless, growth of solar capacity was 65% in 2015 with a 48% increase of investment over that year. Installed solar PV system prices dropped 12% from 2015 and 66% from 2010. In its Long Term System Assessment Update for 2016, ERCOT expects solar energy to grow from approximately 2% in 2017 to 17% in 2031. (ERCOT is the Electricity Reliability Council of Texas responsible for generation, transmission and frequency regulation in the electricity market of Texas).
Although Texas clearly does not lack the geographical and natural factors which contribute to potential for solar energy, it is not performing as well as California, North Carolina, Arizona or New Jersey concerning installed solar capacity. However, it is an upcoming state in growing solar capacity. Currently ranking eighth on cumulated installed solar capacity nationally, Texas moved to the third rank for the third quarter of 2016. Texas is thus just in the beginning phase of adapting solar, but the market is taking up the potential quickly, even though policies to promote it are less ‘aggressive’.
Basically, there are two main ways to gain energy from solar radiation. The first one is the direct conversion of solar radiation into energy by photovoltaics (PV) , which therefore only operate when the sun is shining. The other one, solar thermal energy uses mirrors to concentrate sunlight. The thereby obtained thermal energy generates steam to operate a conventional turbine that produces electricity. The latter method is implemented on the large scale in remote areas. Most large-scale solar utilities can be found in West Texas, which has 75% more radiation than in East Texas. This is confirmed by the adjacent figure. In West Texas this radiation is strongest with 6 to 6.8 kW per square meter per day. Moreover, the abundance of cheap private land sets good conditions for developing large scaled solar thermal projects. In general, Texas had 20% of U.S.’s annual technical potential for concentrating solar power in 2012. Further, the U.S. Renewable Energy Technical Potential report from the National Renewable Energy Laboratory (NREL) states that Texas holds the largest national potential in urban and rural utility scale PV.
Texas’ largest solar farm is owned by CPS Energy in San Antonio. With its 95MW, the Alamo Solar Farm is part of a 400MW project. Contracts between international companies and CPS Energy are part of their New Energy Economy initiative, started in 2011 in which they agree to buy the renewable energy products of the company in order for them to settle in San Antonio and add to the economic development of the area. Apart from San Antonio, Austin Energy has attractive capital incentives for commercial and residential solar investors. Their “Value of Solar” program allows customers to sell generated energy back to the grid and therefore promotes Distributed Energy Resources and energy efficiency. Austin Energy is also open for partnerships on an international level to promote sustainability.
Furthermore, Oncor, a T&D service provider in Dallas used a portion of its investments in energy efficiency for solar incentives when they were bought out by another company in 2008. When the investor’s money was spent up they found it still to be a cost-efficient measure and kept on to these incentives in their standard offer program.
MP2 Energy, Austin Energy, El Paso Electric CPS Energy and Pedernales Electric Cooperative are examples of utilities applying community solar, an alternative to share the output produced by a solar farm with a community, consisting of residents who might not be able to apply solar on their roof.
The attractiveness of solar energy both on residential-, commercial-, and utility scale can be contributed to the dramatic cost incline of solar panels, something the Chinese solar market influences greatly. Just between the two halves of the year 2016, there has been a decline in costs per Watt direct current of residential solar by 8.6%. For commercial solar, this cost decline is 12.5%. Utility fix-tilt and utility single-axis trackers equipment experienced a cost reduction of 17.4% and 15.1% respectively.
With these cost reductions, subsidies like the Investment Tax Credit, a 100% solar property tax exemption and the extensive geographical and geological potential, a sharp uptake of solar energy for distributors, product manufacturers, designers and developers in Texas has only just begun.