A detailed examination of the Texas wholesale electricity market showed wind and solar power generation saved the state approximately $11 billion in 2022. The report, led by Dr. Joshua Rhodes and produced by Ideasmiths, projects that expanding wind and solar capacity could save Texans between $6.1 billion and $15.2 billion per year. This figure marks a nearly 300% increase from previous years. From 2010 to the end of 2022, wind and solar generation produced $31.5 billion in wholesale electricity savings, benefiting all Texas households.
This value is only expected to grow as wind and solar capacity fill the state’s power grid queue.
From 2018 to 2022, these savings led to an average annual reduction of over $200 in electricity costs for the average Texas household. As wind and solar installation increases, this figure is expected to rise.
Tracking market volume, growth, pricing and equipment trends in over 50 major metro areas in the U.S., Ohm Analytics’ platform aggregates a proprietary database of solar projects in the U.S. based on permit and interconnection data.
According to Ohm, Q1 2023 was characterized by a marked downturn in annualized growth across most southern markets, including key solar states Arizona, Florida, Nevada and Texas.
“The 12% decline is a result of an uncertain macro-economic environment coupled with tightening credit markets,” said Joseph Wyer, Clean Energy and Policy Analyst, Ohm Analytics. “This has really impacted the value of solar in low-cost energy states like Texas,” he said.
Texas cities that have experienced the greatest reduction in residential building permits are: Grand Prairie (-53%); Arlington (-37%); Mesquite (-36%); Houston (-22%); and San Antonio (-20%). To accommodate this fluid environment, sales organizations shifted their focus on higher growth markets in the northeast where despite an increase in consumer’s monthly system payments, those costs are still well below a consumer’s monthly utility costs.
What’s the outlook for the remainder of 2023?
“Credit impacts, like higher interest rates, increased dealer and installer fees, will continue to create headwinds through 2023,” said Wyer. Rising utility rates and adoption of third-party ownership as an alternative to financing will help drive a partial recovery.
Looking ahead to 2024, Ohm Analytics still sees strong fundamentals in the Texas market for long-term growth based on consumer demand for resiliency amidst a backdrop of rising utility rates.
When I first became involved with TXSES nearly a decade ago, the biggest challenge was solar adoption by the mainstream. Today, the debate is on how much solar will be integrated to the Texas / ERCOT grid. We know the right answer – let Texas entrepreneurs and innovators integrate renewables and storage on the grid so that it’s more reliable and less expensive for everyone, allowing for the marketplace to define its natural limit.
This happened because of you.
What started a decade ago as grassroots support morphed into something more powerful: grassroots support paired with industry support! TXSES’ members knew they could lower their electric bills and back up their essential household loads but today, industry leaders know that zero-fuel-cost solar with innovative technologies makes solar essential to the grid.
TXSES is helping to make sure that solar is never held back by its own actions.
Its programs and educational efforts will ensure that when Texas calls for more energy, solar can say, “we have more to provide!” Workforce development must always be a foundational pillar and the work TXSES does with the “From Classroom to Career Building: Building the Pipeline for Texas’ Clean Energy Workforce” program with the State Energy Conservation Office means that high school graduates can have the skills to move into well-paying, rewarding careers. Ensuring every member of society, no matter their income level, has the opportunity to invest in low-cost energy for their homes is another positive outcome we anticipate from our new collaboration with the Texas Energy Poverty Research Institute. Everyone should have the financial tools to protect themselves from rising energy costs, so financial model innovations are as important as technical innovations.
Making this all come together takes financial resources. We’re proud to have brought on a new Director of Development to help identify, compete for, and win the grants so solar can expand its footprint across Texas. Competition for grants is tough but when foundation leaders hear what we’re doing in Texas, they step up. We’re thankful for all the support we receive. Whether from charitable foundations, or our business members who have invested in TXSES, or individual members who are the original solar advocates in Texas – we thank you for your generous and frequent support.
As I conclude my second term as the TXSES board chair, let me say a few thank you’s.
All things start and end with the Executive Director, Patrice ‘Pete’ Parsons, who does so much for the organization. Me and my fellow board members remain inspired with what she accomplishes. Pete is the exemplar of passion and energy. Thanks to every board member who volunteered to serve. Each of you, past and present, has brought unique skills, viewpoints, and relationships that help TXSES “punch above its weight.” Keep casting the net wide and far for those who are enthusiastic about our important mission.
The final thanks are to you, our TXSES members and #1 advocate for what we do. At TXSES, we don’t lobby. We don’t write legislation. But as we’ve done for more than four decades, we support people and programs that educate all Texans about the benefits of solar for all Texans.
Lastly, the Texas Legislature convenes in January for its biannual session. We’ll continue to be on point identifying critical issues and providing independent insight. Make sure you tell your Representative and Senator that solar is important to you and important for Texas.
Solar has enjoyed great success across Texas these past years. Even more opportunities lie ahead. It’s been my great privilege to be around the very best solar advocates to contribute to the TXSES mission. Thank you for letting me be part of this important group.
With the whopping amount of solar PV adorning rooftops since the 2021 Snowpocalypse, our business members tell us they’ve never been so busy. It’s clear: homeowners are keen on having solar on their roofs and taking advantage of the value that the system adds to their home while they live in it and when they sell it.
Carrie York, Austin real estate broker, is one of those recent solar rooftop homeowners. “After the Snowpocalypse, I decided to go solar,” she said. “I’d wanted to lessen my carbon footprint for some time but losing confidence in our grid was the catalyst.”
Credit: Carrie York
A recent Federal Energy Regulatory Commission (FERC) assessment states that the Texas grid remains almost as vulnerable to extreme winter weather as it was back in February 2021, despite the Texas Public Utility Commission’s assertion that the grid is more reliable than ever.
Although York has been a realtor in Austin for more than three decades, she’s closed only a handful of solar homes. Despite a GREEN designation for REALTORS® which offers a high-performing homes certification, York thinks that few agents really understand the value of rooftop systems, although that might be changing with consumer behavior, much like York.
Mathew Venneman, former mortgage advisor and now with Freedom Solar, concurs with York.
“After speaking with realtors, I found that many of them lacked general knowledge of how solar works or had little to no understanding of what solar can do for their clients and communities. I’m here to change that,” Venneman said. Incidentally, Freedom Solar installed a 100kW rooftop solar system at the Austin Board of Realtor’s headquarters in 2014.
On-line real estate marketplace Zillow gives solar thumbs-up for comfort, livability and utility savings. In 2019, Zillow researchers found that solar homes sold for 4.1% more on average than comparable homes without solar.
“It all depends on how it’s presented to clients,” says Venneman. “Take two homes, one without solar valued at $500K and the other with solar valued at $520K. While the mortgage on the $520K home will be more, perhaps $75-$95/month more, that cost will easily be recovered from the utility savings,” he said. “And that value is exponential…it’s going to increase as utility rates increase. Win-win-win-win.”
Texas law allows property value to go up when homeowners add wind or solar systems but doesn’t increase property taxes. “Property value added from PV systems is 100% tax-exempt,” says Venneman.
Valuing a rooftop system depends on whether the panels are leased, financed or bought outright.
According to Fannie Mae, solar panels can only be included in the home’s appraised value if they’re owned outright or financed as a home fixture so that they can’t be repossessed if the loan defaults. Being able to include panels in an appraisal and sell them as part of the property simplifies the lending process for potential buyers. Owners of solar systems are also eligible for the 30% federal tax credit.
But not everyone can afford the upfront cost of the system which can run into the tens of thousands depending on size and storage capabilities.
Systems can be financed. In fact, the 30% federal tax credit extends to financed panels as well. Typically, most mortgage lenders require the system to be paid off and transferred to the new owner upon closing to prevent the property from being devalued should the panels be repossessed by a third-party lender.
“I went with company financing and got the 30% federal tax credit,” said York. “In my opinion, lenders aren’t up to speed in this area, and they tend to go with what the appraiser says. Clearly it’s a process that needs work so the home and system realize the proper value. Now that I’m a solar homeowner, I’ll be educating buyers and lenders about the process.”
Finally, homeowners can have a solar lease or PPA (power purchase agreement) and while the easiest way to go solar, it’s the most complicated option for the seller.
In a solar lease or PPA, the homeowner buys power from a solar company, rather than buying the solar system itself. In this case, lenders take the position that because the panels are owned by a third party, appraisers are unlikely to attribute value to them.
With a standard lease, a solar provider charges fixed monthly payments (or sometimes escalating payments over the life of the lease), regardless of the amount of power you receive from the panels. By contrast, a power purchase agreement bills you a fixed rate per kWh of power produced by the panels.
Some companies will guarantee a certain amount of energy production from your panels and will refund you the difference if the system produces less. The leasing company is also responsible for the maintenance of the panels.
“I always tell homeowners that if it sounds too good to be true, then most likely it is too good to be true,” said Venneman. “If a solar company is offering 20-year leasing terms and has been in business for less than five years, it’s probably best to go a different route.”
With his mortgage background, Venneman offers a free solar 101 training for realtors and mortgage bankers. “No other asset…not a pool, kitchen or bathroom upgrade will give your home the kind of monthly dividend that a solar roof will give you,” said Venneman. “We’re changing the way Texans get their power!”
On a recent Saturday afternoon, I took a drive to Whispering Valley to see for myself what a 2,000-acre planned community of sustainable design and innovation looks like. Located east of SH-130 Tollway on FM 973, Whispering Valley is seven minutes from Tesla’s Gigafactory, 12 minutes from Austin Bergstrom Airport and 25 minutes from downtown Austin. Once built out, Whisper Valley will include 5,000 single-family and 2,500 multi-family homes, retail space, restaurants, office parks, entertainment venues, two schools and a 600-acre park.
Whisper Valley is developed by Taurus Investment Holdings and Shell New Energies through its EcoSmart Solution, a green energy services provider that designs and delivers geothermal and other distributed energy resources infrastructures. According to its website: We seek to enable developers and builders of large-scale new construction neighborhoods to create energy-efficient communities and homes and provide new homeowners with affordable, comfortable, and sustainable living.
Currently, Whisper Valley is the largest sustainable development in the US to use geothermal power for all its residences and commercial buildings. In addition to the geothermal network, Whisper Valley homes and commercial buildings feature rooftop solar, EnergyStar rated appliances, smart home technology like NEST thermostats and Sense energy monitoring, smart materials use, equity, community and resilience. In addition, all homes are pre-wired for Level 2 electric vehicle charging. Thanks to the Inflation Reduction Act of 2022, homeowners can take advantage of the 30% federal tax credit for their rooftop solar systems through 2032.
It’s won a slew of awards for its innovation in sustainable design and development from the Home Builders Association of Greater Austin, the Austin Green Awards, and the Austin Business Journal.
What’s it like to live at Whisper Valley? I caught up with two of its current residents who have been living in the community for the past year.
“We love it here,” said structural design engineer, Eric Feuge. “We’re leasing for a couple of years until Phase 6 in Village 1 is complete. Then we’ll buy.”
Feuge and husband Ben Miller have been wowed by the energy efficient features in the 1,900 square foot home.
“What’s so astonishing to us is our utility bills,” said Feuge. “Before living here, we lived in a 600 square-foot apartment in Austin and our utility bills here are exactly the same as that apartment! That says volumes about the kind of energy efficiency benefits at this home compared to what we didn’t have at the apartment.”
As a structural engineer, Fegue understands the philosophy of building fast versus building right. “There are always construction issues in large, planned communities,” he said. “It’s important to do it right the first time.”
What’s surprised Fegue and Miller the most about living at Whisper Valley is how quiet it is outdoors. “Since there aren’t any outside HVAC units cycling off and on, it’s amazingly quiet in the neighborhood,” he said. “We have exactly what we’re looking for.”
Solar and wind energy saved Texans nearly $1 billion a month this year in electricity costs, according to a recent clean energy study from energy system analysis group IdeaSmiths LLC.
In the first eight months of 2022, renewables saved the Electric Reliability Council of Texas, which operates the grid, about $7.4 billion, the report shows, or about $925 million per month. Renewables are on track to save Texans $11 billion total this year.
“With a coal or natural gas power plant, you have to both build a power plant and continuously buy fuel to burn in that power plant, and so there’s higher ongoing costs,” said University of Texas Austin research scientist and IdeaSmiths executive Joshua Rhodes, who led the research. “Wind and solar generally produce very cheap electricity because they don’t have fuel costs … after you’ve built the plant there are no fuel costs associated with generating electricity.”
The report quantifies the economic benefit of renewables in terms of electricity cost, water usage and pollution. The report doesn’t address the impact of renewables on grid reliability.
