SHARE:    

THE STATE OF SOLAR: Harnessing the sun to generate power

1006
 2016


Joshua Regalado, left, and, Michael Ojeda, technicians with Austin-based Freedom Solar Power, install a roof-top solar system on a home. It’s one of 40-70 solar systems the company installs each month in Texas. (Photo by Sarah Beal)

By Will Holford
 

Everything’s bigger in Texas. Well, almost everything. Despite 268,000 square miles and some of the most intense sunlight in the country, Texas lags behind several smaller states in energy generated by solar power systems. 
 
Texas’ 534 megawatts of installed solar energy capacity ranks 10th in the nation, according to the 2015 U.S. Solar Insight Report. That calculation of Texas’ installed solar capacity includes only utility-scale solar projects. It does not include all the solar power installed at homes and businesses. 
 
California leads the nation with 9,976 megawatts of solar capacity as of November 2015. Arizona, New Jersey and North Carolina rank second through fourth respectively. 
 
One megawatt can power about 200 homes during peak demand hours, which historically occur during hot summer afternoons in Texas. 
 
Texas solar production lags because of simple economics. The cost of electricity is higher in other states, making the cost of solar power more competitive. Also, several states have mandates and other policies that have increased solar power installations. 

CLICK HERE TO VISIT OUR SOLAR EVENT PAGE ON FACEBOOK
 
This summer, Texans broke records for hourly peak demand for energy. The Electric Reliability Council of Texas, ERCOT, which manages the electric grid for most of the state, recorded power demands topping 70,000 megawatts and 71,000 megawatts Aug. 8-11. 
 
Texas’ solar power producers benefit from our summer sun. When demand for energy is peaking from 3-6 p.m. due to soaring temperatures, solar systems are generating power. At that time of day, that can offset the need for electricity from traditional power plants that rely on coal or natural gas. 
 

Now, Texas is on the verge of significant solar-power growth. As of May, ERCOT reported 7,414 megawatts of utility-scale solar projects in development (although not all of those will become reality). By 2030, ERCOT estimates there could be 13,000 megawatts of installed solar capacity in its region. 
 
The U.S. has more than 27 gigawatts of solar power installed and recently passed the 1 million mark for individual photovoltaic solar power installations, according to Charlie Hemmeline, executive director of the Texas Solar Power Association. In 2015, solar installations accounted for 30 percent of new electric generation in the U.S., which is about the same as natural gas at 29 percent, but trailing wind at 39 percent, he added. 
 
“The cost of generating electricity with solar has fallen 82 percent since 2009,” Hemmeline said. “There have been improvements in manufacturing, technology, efficiency, financing and installation. Innovation across the whole chain has led to that price drop, and it’s sustainable.” 
 
The cost will continue to come down, but not as dramatically, Hemmeline said. 

CLICK HERE TO SEE A SOLAR POWER TIMELINE
 
The number of Bluebonnet members who have installed solar power systems on their homes and businesses has steadily increased in the past few years. Though still a small number at 191 members, 56 were built in 2014 and 60 in 2015. With 36 new installations through July, 2016 is on pace to surpass last year’s total. 
 
A new report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory puts prices for solar photovoltaic power systems at an all-time low. The cost to install a residential solar system was as low as $3.30 per watt, according to the report. At that price, the average residential solar system on Bluebonnet’s grid would cost $23,100 to install. The price per watt varies depending on equipment manufacturer, and installation and financing costs. 
 
Residential solar projects are relatively small, typically capable of generating between 5 and 10 kilowatts. A 5-kilowatt system typically consists of 15 photovoltaic solar panels, covering about 500 square feet. The average residential solar power system on Bluebonnet’s electric grid can generate 7 kilowatts. The photovoltaic solar panels are installed on rooftops or on ground-mounted steel supports. They have an estimated 20- to 25-year lifespan and are owned by the property or business owner. 
 

Though much more affordable than a few years ago, residential solar power’s cost competitiveness varies from one city to another, from one utility to another, and depends on many other factors. 
 
One of those is how utilities compensate consumers for the energy produced by their solar power systems, said Dr. Fred Beach, the assistant director for energy and technology policy at the University of Texas at Austin’s Energy Institute. 
 
Some city-owned utilities own and operate power plants. They, like Austin Energy, might offer rebates to customers who install solar systems. The rebates come on top of a federal tax credit. Rebates work well with a city-owned utility business model because every kilowatt generated by residential solar is a kilowatt that does not need to be generated by an expensive power plant or bought on the wholesale market. Those wholesale market costs can spike during periods of peak power demands. 
 
Other factors: Consumers’ preferences and motivations. 
 
“There is no average customer,” said Bret Biggart, managing director of Austin-based Freedom Solar Power, a privately owned company that installs solar power systems on homes and businesses in Texas. “Everybody has a different reason for going solar. Some people do the math and see it as a good investment. Some want to pay their utility less money, hedge against future increases in electric rates. Some want to reduce their carbon footprint, control where their energy comes from.” 
 
Location makes all the difference in the cost-effectiveness of solar energy systems. Freedom Solar Power installs 40 to 70 solar power systems per month across the state. “It has everything to do with where you are regionally,” Biggart said. “We’ve installed the same sized system in different locations and all had different payback periods, depending on the utility.” 
 
Regardless of which city they live in or which utility provides their power, all consumers who install solar power systems will benefit from a 30 percent federal tax credit that Congress recently extended. 
 
Like many co-ops, Bluebonnet does not offer rebates to members who install renewable generation systems. Bluebonnet purchases its wholesale power through long-term contracts, primarily with the Lower Colorado River Authority. Bluebonnet’s revenue comes from its members, through their electric bills. Therefore, any rebate would have to not only benefit the member who received the rebate, but also benefit or provide value to members who paid for that rebate by paying their electric bills. 
 
Bluebonnet members with a renewable energy system connected to the co-op’s electric grid have meters that register how much energy they purchase from Bluebonnet and how much energy their system sends to the grid when it produces more than they consume. If the member consumed more energy than their system produced during a billing cycle, they are charged the retail electric rate for the kilowatt hours they purchased from Bluebonnet. When their system produces more than they consume, Bluebonnet pays them at the average annual wholesale power rate, which was 4.6 cents per kilowatt hour in 2015. Members are paid in January or February for the energy their system sent to Bluebonnet’s grid in the previous calendar year. 
 
Bluebonnet is studying how the increase in members with renewable energy systems will impact co-op business. As that number increases, the co-op will need to implement a balanced rate structure that equitably benefits members who have solar and wind power systems as well as the rest of its members. 
 

Bluebonnet is also working with its wholesale power provider and solar power providers to evaluate the cost of adding solar to the co-op’s power generation portfolio. Bluebonnet does not currently have any solar power in its generation portfolio from wholesale power providers. 
 
“We’re watching solar prices in the wholesale market very closely and what terms are available for short- and long-term power purchase agreements,” said Matt Bentke, Bluebonnet’s general manager. “Solar energy will be an important part of the state’s power generation market going forward. Private companies and utilities are investing in large-scale solar projects, and though it’s still a relatively small number, we have seen an increase in the number of members who have installed solar energy systems at their homes and property. 
 
“Many more members are asking us what it would take to install solar on their homes or businesses and when we will add solar energy to our generation portfolio,” Bentke said. “We have to pay attention to the value to our members. With every generation decision we make, we need to balance all the costs and benefits.” 
 
Solar power on the wholesale market is typically provided by utility-scale projects, generally 10 megawatts or larger. Utility-scale projects are owned by private companies that sell the power they produce on the wholesale market, generally in mid- to long-term contracts with utilities that distribute the power to their customers. They can also be owned by utilities that distribute the power to their customers, or sell it on the wholesale power market. 
 
Austin Energy and San Antonio’s CPS Energy are two city-owned utilities that have power purchase agreements with utility-scale solar power projects. Austin Energy buys 30 megawatts from a solar power project on 280 acres near Manor in Travis County, and has contracted with Recurrent Energy for 150 megawatts of power to be produced at a solar farm under construction near Fort Stockton in Pecos County. According to CPS Energy’s website, it purchases power from nine solar farms that are capable of generating up to 230 megawatts of renewable energy. 
 
Though Texas lags behind several states in installed solar energy capacity, it leads the nation in wind generation. Texas has more than 17,000 megawatts of installed wind capacity, which accounted for about 10 percent of electricity generated in Texas in 2015. There is one challenge with wind or solar that must be considered: When the wind isn’t blowing or is blowing too hard, or if the sun isn’t shining, no energy is being produced. 
 
Batteries and other storage technologies are being developed, but until they are technologically and economically viable, Texans who want and need reliable power will remain connected to the electric grid.
 

« Return to News