Texas Comptroller Energy Tour: Solar Energy Overview

Exhibit 1 Source: U.S. Energy Information Administration

According to the Solar Energy Industries Association (SEIA), as of the first quarter of 2023, there were more than $21 billion in total investment in solar in Texas. Additionally, the SEIA ranks Texas first in the nation in projected solar energy growth, with more than 40,000 megawatts (MW) of added solar capacity projected during the next five years.⁸

According to the Public Utility Commission of Texas (PUC), from 1995 to 2023, 9,469 solar-powered, electric-generating projects were completed in Texas, and another 23,686 were announced during the same period.⁹ The power-generating capacity of the completed projects ranges from as low as two MW to a high of 427 MW (Exhibit 2).

Occupational Outlook

According to the 2023 U.S. Energy and Employment Report, in 2022 there were nearly 15,000 solar electric power generation jobs in Texas, representing an almost 11 percent increase from the previous year. According to Chmura, a labor and economic market research consulting and software firm, solar electric power generation jobs in Texas paid an average annual wage of more than $109,000 in 2022. That same year, solar electric power generation contributed $877.8 million to Texas’ gross domestic product.¹⁰

According to the Interstate Renewable Energy Council (IREC), solar energy jobs nationwide were up in 42 states, increasing 3.5 percent from 2021 to 2022.¹¹ In 2022, Texas ranked fourth in the U.S. for most solar jobs and has a projected employment growth of 7.5 percent for 2023.¹² IREC anticipates that achieving annual benchmarks set in the IRA will require hundreds of thousands more workers to install, design, manufacture and manage clean energy projects.

Current Issues

Solar energy has great potential in Texas, but also has its challenges. In 2022, ERCOT curtailed, or reduced, 9 percent of its solar generation due to the lack of high voltage transmissions lines and energy storage in the state. Solar facilities are more abundant in West Texas where land is less costly, while East Texas lacks the infrastructure needed for proper transmission of solar generation.¹³ Additionally, solar is weather dependent and can be difficult to collect during cloudy and rainy days, during nighttime, and during winter when daytime is shorter. Battery storage, meaning storage of renewable energy including solar, allows renewable energy to be deployed when needed. However, battery storage is often costly and may have limited life spans.¹⁴ Recent advancements in battery storage, have allowed for higher energy density, longer storage lifespan, easier installation, and increased safety features.¹⁵ Additionally, solar energy power plants often require significant amounts of space and land. According to SEIA, utility-scale solar power plants can require 5 to 10 acres of land per MW of generating capacity, Many CSP plants require construction on flat land with less than a 1 percent slope, while utility-scale PV can utilize land with steeper slopes.¹⁶

Outlook

According to the EIA, solar is the leading source of new energy-generating capacity in the United States and Texas is predicted to have a 7.7 GW increase in solar capacity in 2023.¹⁷

Solar installation projects have increased nationwide over the past decade, peaking at more than 24,000 installations in 2021 (Exhibit 3).¹⁸ Solar technology is improving, while the costs associated with solar energy, including residential, commercial and utility costs, have declined by 43 percent during the last 10 years, according to the SEIA.¹⁹

Federal and state incentives helped facilitate significant growth in utility scale-solar power in Texas, helping to spur investment in renewable energy. Federal incentives such as the Investment Tax Credit provide a direct credit that covers a portion of investment costs for a solar project that has helped advance the energy source. The 2022 federal Inflation Reduction Act (IRA) extended the Investment Tax Credit for the next 10 years. According to the Federal Reserve Bank of Dallas (Dallas Fed), the Investment Tax Credit can help to create decreases in the cost of new solar projects while also increasing solar cost competitiveness in relation to other power generation types²⁰.

Conclusion

Solar energy supports the growing energy demand for Texas’ increasing state’s population. Renewable energy sources in Texas are rising in use and according to the EIA, both wind and solar generation²¹  Advancements in solar technology, including battery storage, coupled with to produce solar power over the past decade paints a positive outlook for solar energys it has become a valuable part of the Texas’ energy portfolio.