California is the king of solar in the United States. As of 2020, California had nearly 3 times as much solar power installed as any other state. (Of course, in relative terms, the competition is much closer, but today we’re just focused on total installed power capacity, not capacity per TWh or capacity per capita.)
The big news is that arch rival Texas is aiming to come up on California fast and challenge it for the title. At least, that’s what the US Energy Information Administration (EIA) is forecasting. Texas, home to the most wind power capacity in the USA, is expected to add 10 gigawatts (GW) of utility-scale solar power capacity by the end of 2022. That compares favorably to the 3.2 GW expected to be added in California in that timeframe. In fact, according to the EIA’s Preliminary Monthly Electric Generator Inventory, Texas has long-term ambitions it is now pursuing. “One-third of the utility-scale solar capacity planned to come online in the United States in the next two years (30 GW) will be in Texas,” the agency writes — hence my headline.
Texas solar has already started booming a bit, and 2020 saw the installation of 2.5 GW of solar capacity, the largest uptick in the country last year. Nearly double that, 4.6 GW of solar power capacity, is expected in 2021, and more than double the 2020 total, 5.4 GW, is forecast for 2022. Adding all those figures up, the EIA is forecasting total installed solar power capacity of 14.9 GW in Texas at the end of 2022. With California expected to be slightly below 18 GW by then, Texas will have significantly closed the gap with the Golden State in this new energy gold.
A large portion of the utility-scale solar power growth through 2022 is triggered by the USA’s solar Investment Tax Credit (ITC), and its phaseout. Currently, a solar power project can land the owner a 26% tax credit, but that changes to 22% for solar projects that start in 2023 and then drops much more steeply to 10% for projects started in 2024 or beyond. Naturally, since the critical factor is the started in time, we can still expect much to be completed beyond 2022 as a swarm of projects started at the end of 2022 and as another swarm started at the end of 2023 are completed.
“Other factors driving solar investment in Texas include lower solar technology costs and plentiful sunlight, particularly in West Texas’s Permian Basin, where about 30% of the state’s planned solar capacity will be built,” the EIA writes. “In addition, because solar generation is greatest in the middle of the day, when wind generation is typically lower, available transmission lines that already handle the large amount of wind power in the state have helped set the path for record-breaking planned solar capacity additions.”
A tiny portion of Texas power capacity (4%) and a tinier portion of Texas electricity generation (2%) comes from solar power at the moment, and solar will just start making its mark from this surge in 2021 and 2022. Though, clearly, there is a long way to go beyond 2022. Regarding that two-year period, the agency writes:
“Although wind capacity in Texas has grown rapidly in recent years, solar is expected to make up the largest share of the state’s capacity additions between 2020 and 2022. Almost half of the additions during this time period will be solar, surpassing wind (35%) and natural gas (13%) additions.”
Despite dominating growth, the first of the following charts show visually how small the solar portion of state’s power capacity is expected to be solar in 2022:
Globally, solar power has become the cheapest option for new electricity generation capacity, and that’s certainly the case in sunny places like Texas. With no real competitors on the horizon who can dethrone solar, expect its growth to continue strong indefinitely. As costs further decline, it increasingly outcompetes electricity generation from existing power plants as well. For more on these topics, see:
- Solar PV Panels Were 12× More Expensive In 2010, 459× More Expensive In 1977
- Solar Power = “Cheapest Electricity In History”
- Solar Panel Prices Have Dropped Off Cliff & Sunk Into Ocean — Solar Panels 9× Cheaper Than In 2006
The above forecasts just cover utility-scale solar power plants. Rooftop solar also benefits from low solar panel costs and dropping installation and “soft costs.” Super cheap rooftop solar power will increasingly appeal to Texas homeowners, especially alongside batteries that can keep the lights on in the event of a blackout (as we saw in the recent blackout crisis in Texas).
Also, if you have further insights into the Texas solar market — utility-scale solar or rooftop solar — let us know down in the comments below with more context, details, or even cost comparisons.