Solar power starts ascent in Texas

Source: By Mitchell Schnurman, Dallas Morning News • Posted: Tuesday, January 19, 2016

For years, Texas consumers have been buying electricity through renewable energy plans. Now TXU Energy, the state’s largest electricity retailer, has added a twist: 100 percent solar power.

For those who want to support solar, it’s an alternative to investing in a rooftop system, the company said in a recent release. But if you want solar panels, TXU has a program for that, too, which it launched in November with partner SunPower.

As a marketing campaign, this isn’t groundbreaking, given that consumers have so many choices already. But the push says much about the coming boom in Texas energy.

“Solar is poised to take off in Texas,” said Peter Sopher, a policy analyst for the Environmental Defense Fund in Austin.

He compared it to wind power a decade ago, when turbines were popping up in West Texas. In 2005, wind generated 1.4 percent of electricity on ERCOT, the grid that handles most of the state’s electric load. For the first 11 months of 2015, wind’s share was over 11 percent. And in November, it was over 18 percent.

Texas is easily the No. 1 state in wind, with more than twice the capacity of California.

On solar, however, Texas has been lagging. It ranked No. 10 among the states in solar power as of September. Texas doesn’t match the incentives of some states and has an abundant supply of other cheap energy, including natural gas.

But prices for solar panels have fallen over 80 percent since 2009, making it competitive with fossil fuels. That’s ramped up the outlook in Texas, because there’s plenty of sun, a growing population, a huge electric load and a hyper-competitive electricity market.

Last year, solar installations on ERCOT grew almost 50 percent. This year, solar generation could jump sixfold, according to ERCOT projections, which are based on developer agreements to connect with the grid.

By 2030, solar will add 14,100 megawatts of power if proposed rules to cut emissions and haze remain in place, ERCOT estimates. That could power over 2 million homes in the summer. And if solar builds out as projected, it would account for more new capacity than wind and natural gas plants combined, ERCOT said.

These projections came before last month’s federal budget deal, which extended the tax credits for renewable energy — and will help keep the momentum going.

Last summer, Austin Energy signed solar power agreements for less than 4 cents a kilowatt-hour, hailed at the time as “the cheapest solar ever.” A week later, NV Energy in Nevada signed a solar power deal at an even lower price.

Luminant, the state’s largest power generator and a sibling of TXU Energy, announced a deal last fall to buy 116 megawatts of solar from a large-scale plant in Upton County. The SunEdison facility is expected to come online this year, and Luminant said the purchase agreement is largest in the nation for a generator in a competitive market.

“It’s another reflection of how solar is moving into the mainstream,” said Charlie Hemmeline, executive director of the Texas Solar Power Association. “This is really about the economics.”

Rooftop solar is growing, too. Over 17,000 homes in the state had solar panels at the end of 2015, according to the Texas Solar Energy Society.

TXU’s all-solar plan offers electricity at 12.9 cents per kilowatt-hour for a three-year contract. That’s high, even compared with other 100 percent renewable plans on the state’s website,

But if the all-solar option becomes popular, other retailers will jump in and consumer prices will fall, especially as solar generation increases. That’s what happened with wind.

It’s also notable that energy programs for commercial and industrial customers often migrate into the residential market. Companies were early adopters of purchase plans indexed to natural gas, for instance, and homeowners were soon weighing similar offers.

Large users are leading the way on solar, locking in low prices, shrinking their carbon footprint and enjoying the halo effect of going green. In the next few years, a lot of Texans will be making a similar call.