Capitalizing on Texas’ Sunshine: Trends, Threats
- Dec 13, 2019
Texas’ top energy sources have long been coal, natural gas and nuclear. Yet, in recent years, the Lone Star State has also been leading the nation in renewable energy. More precisely, nearly a third of U.S. wind energy capacity is in Texas, according to American Wind Energy Association’s report for the third quarter.
With an average of 230 sunny days per year, solar production is also gaining ground in the state. Texas ranked sixth in the country in the second quarter of 2019 with more than 3 gigawatts of solar capacity from the 54,090 installations throughout the state, according to the Solar Energy Industries Association (SEIA).
The organization forecasts Texas will climb to the second position by 2021, behind California, with the western part expected to expand the most as the region is already a big renewable energy producer. The area is densely populated with wind parks, which would simplify the addition of solar farms due to existing infrastructure. The number of solar companies in the state in the second quarter of the year surpassed 650, SEIA data shows, nearly half of which are installers/developers.
Texas doesn’t have a statewide solar tax credit or solar rebate program, but some organizations and local governments offer incentives to homeowners who want to switch to solar. Austin Energy, CPS Energy, Oncor, Guadalupe Valley Electric Cooperative, Garland Power and Light, and the City of Sunset Valley are among them.
Commercial Property Executive reached out to Kyle Frazier, the director of sales of the largest residential solar installer in the state, Freedom Solar. The company works with both residential and commercial clients and has expanded its headquarters in Austin, Texas, this summer.
How has the solar market evolved in Texas since Freedom Solar was founded, in 2007?
Frazier: As the installed cost of solar has come way down, the adoption has gone up proportionally. The amount of solar installed by homeowners, businesses and utilities combined has doubled over the past three years and is expected to double again over the next five years, according to the Solar Energy Industries Association. Toyota and Ikea are among the largest corporate solar users in Texas.
What are the biggest hurdles that stand in the way of solar adoption?
Frazier: The biggest hurdle is probably an easy way to finance solar. The rest is education. Most business owners are not sitting around thinking about saving the environment or the benefits of solar. They are trying to save their business in some cases or at a minimum be more competitive and profitable. We spend a lot of time explaining to business owners how solar can help them accomplish that goal.
What are your thoughts on the trade disputes over Chinese solar panels and the U.S. import tariffs?
Frazier: The solar industry is fairly resilient. We are certainly not in favor of tariffs, but it hasn’t slowed down the growth in the industry.
What about the Federal Energy Regulatory Commission’s proposed rules of Public Utility Regulatory Policies Act regulations? Aid or hindrance?
Frazier: We don’t believe the proposed rules would have a significant impact on the solar industry in Texas. Because we effectively have a standalone electric grid managed by ERCOT, Texas is generally less impacted by federal energy regulations than other states.
What’s changing faster in the solar industry, the pricing or the technology? Tell us more about this trend.
Frazier: It’s definitely the pricing. The technology innovation is incremental, but there are inherent limitations to the maximum “efficiency” that photovoltaic technology can achieve. In most cases, today’s technology is more than sufficient to offset a customer’s electric bill. Meaning, a more efficient panel doesn’t do anything other than occupy less roof space. What business owners care about is the return on their invested capital.
What threats and opportunities do you see for the next decade when it comes to sustainability and real estate?
Frazier: It’s mostly all opportunity from my perspective. Opportunities to conserve resources have the added benefit of saving money. The LED technology, rainwater collection, mechanical systems that run on DC motors, will drive down consumption. Solar, fuel cell and other generation technologies will produce more of the energy business owners need at the place where they need it.