State Energy Plan Advisory Committee Meeting Puts Renewables on the Chopping Block
On Friday, August 12, 2022, I attended the first publicly announced State Energy Plan Advisory Committee. The committee, which has met only twice since its formation in 2021, has taken no public testimony. In fact, the committee and its anti-renewable stance has finally gained public attention, thanks to good friend and colleague Doug Lewin.
The 12-member committee, appointed by Governor Abbott, Lt. Gov. Patrick and Speaker Phelan, includes representatives from the natural gas and utility industries only. Neither the solar nor wind industries are represented. Although the committee was created during the 87th Legislature in 2021, Patrick announced his four appointees in February 2022.
The committee was tasked with preparing a comprehensive state energy plan that includes methods to improve the reliability, affordability and stability of the Texas grid. Yet the committee held its second full meeting on August 8th to vote on and approvethe State Energy Plan Report, to be delivered to the legislature by September 1, 2022, which begs the question: with only two meetings and no clean energy representatives on the committee, how will renewables fare in a state energy plan moving forward?
At the August 12th meeting, committee members discussed including renewables along new transmission lines to increase the amount of available intermittent renewable energies. Members agreed that renewables’ intermittency makes them an unreliable energy source; they may fluctuate too much to be stable for taxpayers.
Actually, the term isn’t intermittent; it’s variable. But thanks to improved weather predictions and operating experience, renewables have two things fossil plants don’t: they are highly predictable and have well over 95% availability. That is, renewables are there when you expect them and need them to be, outperforming other power plants that were offline or failed to meet expectations. Managing large amounts of renewables does take work, but as shown on recent hot peak demand days or during Winter Storm Uri, they overperform and can save Texans millions in costs.
After widespread blackouts during Uri, regulators approved a series of market reforms designed to avoid grid disruptions this summer — and the costs for those reforms are already showing up on our bills. In fact, Texas consumers are now paying about $0.20/kWh, about double what they were in January.
The issue isn’t whether renewable energy technologies aren’t advanced enough or Texas has an insufficient amount of them. During the first three months of 2022, wind and solar accounted for a record 34% of generation within ERCOT, outperforming the state’s fleet of combined-cycle gas turbines as the dominant source of electricity, according to a new report by the Institute for Energy Economics and Financial Analysis. And in July, solar met 10% or more of demand at the peak hour on 25 of July’s 1 days. On the other four days, solar was above 9.6% of total demand at the peak hour.
The issue is transmission.
ERCOT, our power grid, is isolated from the rest of the nation’s power grids, limiting our ability to import power when we need it and export power when we have excess. During Winter Storm Uri, we were unable to receive power from neighboring power grids. And just this summer, some West Texas wind generation went offline because of transmission constraints, depriving cities like Houston, Dallas or Austin of affordable, clean power.
With an extra $27B in state coffers for the upcoming 88th Legislature, legislators have the distinct opportunity to enact smart policies like upgrading inadequate transmission capabilities so that renewables can provide grid stability during high energy demand summers and winters at competitive prices.
Rather than imposing punitive regulatory actions on renewables, despite clear evidence of their benefit to the grid, helping Texas’ decision makers recognize the enormous benefits of renewable energy technologies so they can propose sound clean energy policies that remove barriers for a 21st Century grid is the more sensible approach.
This is what TXSES does best.
For more than four decades, TXSES has been the pre-eminent statewide organization that develops independent, fact-based solar energy information and brings them to leaders in communities like yours, enabling them to make the best decisions that inspire innovation and lay the foundation for a 100% clean energy future for us all, one community at a time.
Touted as “the single biggest climate investment in US history,” President Biden signed the historic $739 billion Inflation Reduction Act (IRA) on August 16, an unprecedented level of federal support toward our transition to a clean energy economy.
Credit: whitehouse.gov
Referred to as “Energy Security and Climate Change,” investments aimed at reducing CO2 emissions below 2005 levels by 40% by 2030, account for $369 billion or about 50% of the bill’s overall funding.
One of the more celebrated provisions in the IRA is the 10-year extension of the Investment Tax Credit (ITC) which applies to individuals like you and me. Instrumental in launching the solar industry, the ITC’s 10-year extension at 30% of the cost of the installed equipment will step down to 26% in 2033 and 22% in 2034. Here’s what the tax credit looks like before and after the 10-year extension:
Pre-IRA ITC: (assume $18K system and $1K utility rebate)
0.26 * ($18,000 – $1,000) = $4,420 tax credit
IRA ITC: 0.30* ($18,000 – $1,000) = $5,100 tax credit
The 30% credit also applies to energy storage whether it is co-located or installed as a standalone. This enables the retrofit of a battery to a solar array while taking advantage of the credit.
Tax credits will fund the purchase of heat pumps, rooftop solar systems, electric HVAC systems and electric water heaters. Transportation tax credits include $4,000 to eligible low-to-moderate income individuals to buy used clean energy vehicles, or $7,500 for new clean energy vehicles. Energy efficiency in new affordable housing projects will receive $1 billion. Consumer home rebate programs for low-income individuals will offer up to $9 billion for appliance electrification and energy efficiency retrofits.
Another notable element in the IRA is the clean manufacturing program. Designed to last a decade, this facet will enable companies to scale up and increase production volume and efficiency, supporting development across the clean energy supply chain.
Known as the 45X Advanced Manufacturing Production Tax Credit (PTC), named after the section of the tax code it would alter, this production credit would direct roughly $30 billion over the next 10 years to support the production of components of solar panels, wind turbines, inverters and batteries for electric vehicles and the power grid, as well as promote mining and refining the critical minerals that go into these products. The other half of the $60 billion clean energy manufacturing money consists of $10 billion in new investment tax credits and $20 billion in loans for clean vehicle manufacturing.
In addition:
National laboratories: $2 billion for clean energy research;
The Defense Production Act: $500 million for affected companies to manufacture heat pumps and process needed mineral materials;
$30 billion in targeted grant and loan programs for state energy offices and electric utilities to incentivize the transition away from fossil fuels;
Advanced Industrial Facilities Deployment Program with $6 billion will cut CO2 output in chemical, steel and cement manufacturing facilities;
$9 billion for the federal government to buy clean energy technologies, $3 million of which will go USPS for ZEVs (zero emission vehicles);
Clean Energy Technology Accelerator program will fund $27 billion for emission-reduction technologies in targeted low-income communities.
To ensure that the act targets historically disadvantaged communities and avoids the pitfalls of environmental racism, bill authors coordinated with environmental justice leadership, shoring up $60 billion for programs including $3 billion in environmental and climate justice block grants; $3 billion in neighborhood access and equity grants; $3 billion in grants to reduce air pollution at ports; $1 billion towards the procurement of no-emission freight and public transportation; and various bonuses and set-asides within tax credits that incentivize their use in low-income communities.
Nestled between Austin and San Antonio, the City of New Braunfels is home to some well-loved landmarks: Schlitterbahn Water Park, Natural Bridge Caverns and Gruene Hall. New Braunfels is among the 15-fastest growing cities/towns in the US and the fourth fastest-growing Texas city, adding nearly 8,000 new residents between 2020-2021. New Braunfels Utilities (NBU), established in 1942, is a municipally-owned electric, water, and wastewater utility with a board of trustees appointed by an elected city council. To learn more about what was going on with our neighbor to the south, we caught up with Sarah Richards, NBU Director of Customer Solutions.
TXSES: Sarah, a question we always like to ask our guests: how did you find your way to NBU?
Sarah: I’ve worked in the natural resources space for much of my career but mostly on water sustainability issues, specifically on strategic initiatives. My educational background is rooted in the sciences, both hard and social sciences: biology, psychology, and anthropology.
After attending the University of Texas as an undergraduate, I gained teaching and communications skills when I pursued my master’s in education and then was a classroom teacher for several years. I love translating highly technical content into a language we can all understand and act on. It was in my role as a water program officer at the Cynthia and George Mitchell Foundation that I first partnered with NBU on an innovative water project. I’m now fortunate to be here directing that same project as well as providing strategic direction on the energy side.
TXSES: Fair to say energy is a new area for you?
Sarah: For the most part, but the challenges and opportunities utilities face with technology, innovation, and changing business models are very similar on the water and energy side. My passion is strategic program development with achievable goals that cut across issue areas and that require public-facing programs with lots of engagement. With all that’s happening in the clean energy space here in Texas, I couldn’t be happier to be doing what I’m doing at NBU.
TXSES: Back in March and April, NBU hosted a two-day workshop on solar energy, for the management team at NBU. Tell us about that.
Sarah: It was Pete Parsons, TXSES executive director, who made that happen. She reached out to our CEO, Ian Taylor, who was very receptive to the idea. It was so timely for us as we work with solar vendors and other providers on solar projects both residential and commercial. Transition is hard in general, especially for a utility like NBU for utilities writ large and equally hard for a small utility like NBU, experiencing dramatic growth with limited resources. To their credit, NBU leadership has recognized that solar and other distributed energies must become part of the energy mix. My position, Director of Customer Solutions, was created expressly to help with this transition. Pete assembled a dream team of experts to provide the right kind of content and experience specifically for our management team.
TXSES: The agenda looked like a who’s who of distributed energy experts.
Sarah: It was an across-the-board group of experts. There were folks from Austin Energy, CPS Energy, industry, national labs, and consultants, all of whom shared their experience and knowledge about technical opportunities and challenges, funding, state and national examples of community solar, residential and commercial solar programs, valuing solar. The workshop provided a wealth of information that is increasing our team’s understanding and confidence in moving forward with initiatives that are still new to us. On behalf of all of us at NBU, we were so appreciative of Pete and TXSES, and all the incredible speakers for so graciously sharing their time and incredible wealth of knowledge with our team.
TXSES: Have you surveyed your customers about solar and other distributed generation resources?
Sarah: We recently conducted a customer satisfaction survey in which we asked specifically about interest in renewable energy products and programs. More than half of the customers surveyed shared they would find information like guidance on rooftop solar panels valuable or very valuable. We also asked questions aiming to understand our customer values that might motivate participation in new programs. They rated how valuable they would find programs that: 1) reduce their water and energy use; 2) reduce their electric and water bills; and 3) conserve our natural resources. We assumed the financial driver would be the most important, but results showed that while close to 79% were interested in programs that reduce their electric or water bill, 83% of customers would find programs that conserve our natural resources helpful. We’ve also conducted a series of focus groups as part of our utility strategic plan update, and what we learned was that our customers care about natural resource protection. We believe we’re seeing this in the dramatic uptick in our solar programs and electrification opportunities. Our commercial customers in particular are interested in fleet electrification opportunities; this being driven potentially by national and global corporate climate goals.
Long Draw Solar Farm | Borden County | 225MWac
TXSES: Let’s talk about NBUs solar program.
Sarah: I’d love to! With 47,623 electric customers in our service area, we currently have about 400 residential systems and eight commercial systems. Applications for new systems are overwhelming: we have around 100 new projects in the queue, demonstrating exponential growth year-over-year. Our solar rebate program offers $3K for residential and $26K for commercial projects. We’re in the process of developing new guidelines and processes for both customers and solar vendors. Our new programs will provide a greater level of customer education and public outreach on distributed energy and energy efficiency.
I should also mention our solar efforts on the power purchase side. As a retail electric provider that does not generate our own electricity but purchases power through power purchase agreements (PPAs) and on the markets, our largest PPA is for solar energy, keeping our energy portfolio at around 30% renewable energy. The 225 MW Long Draw project in Borden County is a partnership with Denton Municipal Electric, Garland Power & Light, and Kerrville Public Utility Board. It became operational in mid-December 2020 and provides us with 100MW solar energy.
TXSES: That’s a great segue to the two distributed energy workshops this past spring.
Sarah: Those two days were so important for middle and executive leadership to be together in this work. Utilities can operate in silos; this training gave us the opportunity to understand how it will take multiple teams – from finance, power supply planning, electric operations, communications and external affairs, and customer solutions – to be involved in the process. It’s important for us all to understand the issues, especially the pain points, to enable us to craft solid programs that deliver. In our executive post-workshop debrief, we talked about how solar dovetailed with our DERs strategies. No one was pushing a value-driven agenda and while New Braunfels does not have climate action goals, we felt better knowing what other “munis” are doing in that space.
TXSES: Next steps?
Sarah: We’re focused on a new three-year plan to fully design and deploy new and enhanced distributed energy, solar and electric transportation programs. This begins with forecasting electric demand and determining the right mix of distributed energy and solar that we want in our power supply mix. Once we have targets for how much solar and other DERs we need in our system, we will expand residential and commercial rooftop solar programs and look at community solar projects that will help us achieve our targets, all while meeting the needs of our customers.
We’re also interested in exploring interesting projects like the solar-powered parking lot project Big Sun Solar is doing with CPS Energy in San Antonio. That provides a great template for us until we can build up our own programs. We are looking to help our customers with the challenges they are facing on the solar front. Lately, our community has been struggling with misinformation from some rooftop solar vendors. We are committed to providing sound, factual information and additional guidelines that can aid our customers in the rooftop solar process.
TXSES: Seems like NBU would be a great case study for how a small municipal utility becomes a distributed energy resources champion!
Sarah: Fingers crossed; I sure hope so! We still have a lot to learn on this front, but we are excited to grow our program and we are eager to share news of our successes and failures with our partners and friends because they’ve so graciously done the same for us.
TXSES: It’s a story worth sharing. Thanks for the conversation, Sarah.
By Patrice ‘Pete’ Parsons
Executive Director TXSES
Since February, when Russia invaded Ukraine, Texas has been exporting more natural gas to Europe…more than ever before, leaving less gas for Texas consumers and at elevated prices. Coupled with a relentless explosion in the state’s population and record-breaking searing summer temperatures, Texas consumers have been hit with hefty electric bills this summer – at least 50% more than last year.
According to the U.S. Energy Information Administration, the cost of electricity for residents rose 10% in the last year. The average cost of electricity rose to 12.8 cents per kilowatt hour in March. Natural gas prices are up 181% from May 2021 to May 2022. Texas saw the largest year-to-year increase in electricity generation (17.7%) due to experiencing the second warmest May on record.
And it’s only August.
Since February 2021, ERCOT (Electric Reliability Council of Texas), the Texas grid operator, has shifted its historic priority of providing Texans cheap power to focusing on grid reliability. That translates to higher utility bills for you and me. According to City Public Service (CPS), the municipal utility in San Antonio, average June bills rose from $147 in 2021 to $225 in 2022. Incidentally, we’re all still paying for February 2021 and will be for years.
To add insult to injury, the Texas Department of Housing and Community Affairs stopped accepting applications for the Texas Utility Help, an assistance program for low-income homeowners and renters. The $50 million program launched on July 7 and within two weeks, it stopped processing applications. According to sources, it’s unclear if the fund dried up or was ill-prepared to handle the demand. Either way, it’s another Texas consumer energy pain point.
Even though we are all paying the price for it, on the plus side, the state’s record-high sales tax and oil and gas production revenues over the past year translate to an extra $27 billion in state coffers. Lawmakers are already hard at work vying for those funds ahead of the January 2023 legislative session. Grid resilience or transmission upgrades legislation anyone?
What are some Texas clean energy stats?
ERCOT data say solar power is the fastest-growing source of energy in Texas, increasing 70% year-over-year in May.
According to the Solar Energy Industries Association (SEIA), Texas installed 6,060 MW of solar generation capacity in 2021, for a total capacity of 13,947 MW by Q1 2022. Texas now has enough solar power for 1,682,330 homes, with growth potential of 18,401 MW for the next five years. And while only 3.75% of Texas’ electricity currently comes from solar, the potential market is still massive.
In fact, while total electricity demand in the ERCOT region increased by 9% compared with Q1 2021, wind and solar generation increased by 14% and 85% respectively (not a typo). Renewable energy, which accounted for 31.25% of electricity in Q1 2022, surpassed gas-fired energy!
What’s more, ERCOT gives a robust thumbs-up growth forecast for energy storage technologies. Texas had 833 MW at the end of 2021 but installed capacity could reach 5,000 MW by the end of 2022 and 6,500 MW by 2024. Surely that counts for clean energy bragging rights.
Just last week, the long-awaited Inflation Reduction Act includes a 10-year extension of the Production Tax Credit (PTC) at 30%, stepping down to 26% in 2033 and 22% in 2034. The 30% credit also applies to energy storage whether it is co-located or installed as standalone energy storage, enabling the retrofit of a battery to a solar array while taking advantage of the credit. Envision Texas’ clean energy generation in 10 years.
Where’s the solar workforce?
With the inevitable growth of clean energy resources over the next 10 years, the obvious question is will there be enough of a trained, quality workforce to respond to the relentless need?
In the recently released 2021 National Solar Jobs Census, there are more than a quarter million solar workers, an increase of 9.2% or 21,563 more jobs compared to 2020. In fact, nearly every state saw job growth in 2021. Good news: less than one-third of solar jobs require a bachelor’s degree.
Though the surge in solar permits issued and financials like declining hardware costs, local incentives and federal incentives are compelling, our business installer members fret about the severe shortage of workers, from entry-level to professional. According to the 2021 National Solar Jobs Census, nearly 50% of industry respondents cited competition and small applicant pool as the most significant reason for difficulty hiring at solar companies. When it comes to the most difficult positions to fill, 23% cited installation workers as #1, with electricians and construction workers a close second at 22.5%.
At TXSES, we’re keenly aware of the urgent need for quality training and education, and we’re working to plug those gaps with statewide intern and apprenticeship programs. We’re working closely with industry and educators to ensure that the curricula match industry needs so workers are ready on day one.
What can you do?
If you’ve been thinking about installing solar on your roof or subscribing to a community solar farm, join the hundreds of Texans who are thinking and doing the same thing. TXSES’ business member-installers tell us they’ve never been busier, and battery storage is now a regular part of the conversation. With natural gas prices likely to remain high for some time to come, investing in solar, either rooftop or community solar, is a hedge against rising natural gas prices, grid insecurity and extreme weather events. Visit our business members page for installers in Texas.
TXSES Op-Ed – printed in Dallas Morning News & Corpus Christi Caller Times – Sunday, July 17, 2022 By Patrice ‘Pete’ Parsons
In the middle of a heat wave, this renewable source is helping to offset the increased need for energy with help from the sun
As Texans hunkered down again from a “reserve capacity energy shortage” this week, one thing was clear: Texans who have invested in solar helped the electric grid. Read the full article in the Dallas Morning News (subscription only).
Been thinking about going solar? With solar panels at attractive prices, the time to invest in clean energy solutions has never been better!
Join TXSES and become a member of Clean Energy Credit Union!
Clean Energy Credit Union (CECU) is a unique federally chartered credit union. A not-for-profit, financial services cooperative, CECU focuses solely on providing loans that help people afford clean energy products and services like solar electric systems, electric vehicles, green home improvements, and electric-assist bicycles. CECU operates solely online and via mobile devices while offering phone and online support to assist members in all transactions.
Colorado-based, CECU serves members throughout the US, with 7,000+ ATMs and 5,000 shared branch credit unions nationwide, including a large number in Texas which they can access their account from. Since TXSES is partnered with CECU, our members are eligible to take advantage of the lowest loan rates anywhere in the country for solar panel loans through CECU. To learn more about CECU, click here.
To re-up your current membership with Texas Solar Energy Society, click here.
Been thinking about going solar? With solar panels at attractive prices, the time to invest in clean energy solutions has never been better!