Texas Ascension to Renewable Energy Leadership Makes Good Economic Sense

The trend in national media circles reporting on renewable energy advances in Texas often characterizes the progress and development as a somewhat curious happening, given the state’s leading status as an oil and natural gas producer. But leaders in Texas have for several years recognized that the broad growth of wind, solar and bioenergy just makes good economic sense.

Looking at the wind sector, there is more than 18,500 megawatts (MW) installed in Texas – ranking the state first in the country – and more than 5,000 MW is under construction. Wind accounts for more than 12 percent of the state’s energy production, the equivalent of powering 4.1 million homes. Much of the wind development can be attributed to a decision by the state legislature in 2005 to create Competitive Renewable Energy Zones (CREZ), which have promoted the construction of electrical transmission lines stretching from areas of high wind capacity to dense population centers.

Wind’s bottom line in Texas is impressive. The sector employs some 25,000 people in the state and there are currently 38 wind energy-related manufacturing facilities in Texas. Some $33 billion has been invested in wind in Texas and lease payments for wind facilities total more than $50 million each year, most of which is going into rural areas that need it most.

Solar is a more recent arrival to Texas, at least in terms of recent significant growth. But today, the state finds itself on track to become the fastest-growing utility-scale solar market in the United States within the next five years. As of June, the state had 566 MW of solar energy installed, enough to power 61,000 homes, and earning Texas a top-10 ranking nationwide for installed solar capacity. A recent market analysis from the Solar Energy Industries Association shows that by the end of the year, the state’s total solar capacity is expected to more than double. And over the next five years, Texas is expected to install more than 4,600 MW of solar electric capacity (including 4,000 MW utility-scale), second only to California during that time span.

Today, there are nearly 500 solar companies in Texas, employing more than 7,000 people, representing manufacturers, contractors, project developers, distributors and installers.

Bioenergy is relatively early in its development in Texas, but the state has authorized nearly four dozen projects over the past 10 years. While many are ethanol and biodiesel plants, others include biomass-fired electricity generators (a sector that can take advantage of the state’s more than 60 million acres of forestland, second in the nation only to Alaska). High-tonnage sorghum, energy canes, jatropha, castor, cottonseed and sunflower are being developed in Texas specifically for bioenergy purposes.

Given the focus on renewables, it is not surprising that Agriculture Secretary Tom Vilsack chose to come to Texas to announce the department is investing more than $300 million in Rural Energy for America Program (REAP) funds to help hundreds of small rural businesses, farmers and ranchers across the country improve their bottom lines by installing renewable energy systems and energy efficiency solutions. (USDA also announced this week it is providing $3.6 billion in loans to finance 82 electric infrastructure upgrades in 31 states that will build or improve 12,500 miles of transmission and distribution line. The total includes $216 million for smart grid technologies, $35 million for renewable energy and nearly $1.8 million for energy efficiency.)

USDA is investing a total of nearly $80 million for energy projects in Texas, including nine farms and rural businesses in the state that will receive more than $870,000 in REAP grants, and two businesses that will receive REAP loans of $5 million each. The biggest recipient in Texas announced by Vilsack is the Pedernales Electric Cooperative (PEC), which will receive the largest Energy Efficiency and Conservation Loan Program (EECLP) loan ever offered – $68 million – to fund energy improvements to assist a rural portion of the co-op’s service territory. PEC will offer members low-interest loans of up to $20,000 for solar photovoltaic and energy storage equipment, to be repaid through on-bill payments.

The recognition of Pedernales – the largest among the nation’s more than 900 electric co-operatives and host of the Vilsack announcement in Austin – is appropriate, given PEC’s commitment to renewable energy. In 2012 the co-op’s board formalized in a resolution that PEC will generate at least 30 percent of its electricity from renewable sources by 2020. And Pedernales CEO John Hewa is a member of the steering committee of 25x’25’s Energy for Economic Growth Initiative, which aims to spotlight and support rural electric cooperatives that are implementing distributed renewable energy generation and the business models that enable that generation.

Given the bigger picture, Texas is hardly an anomaly in its growingly diverse approach to energy generation. Like many other states, Texas has forward-thinking industry leaders who recognize the value of renewable energy and its inevitable rise in the U.S. energy market. 25x’25 commends those in Texas and across the country who are taking leadership in the move to a clean energy future.

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