Texas Is Set to Become a Solar Powerhouse

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Source: Thinkstock

Source: Thinkstock

Texas could finally become a leader in solar thanks to a new resolution passed by the city council of Austin. The bill will require the municipal utility, Austin Energy, to obtain 60 percent of its electricity generation from renewables over the next decade, and to be completely carbon-free by 2030. It calls on Austin Energy to build 600 megawatts of solar power by 2017, and it mandates the city support the build out of 200 megawatts of distributed solar on rooftops.

The council resolution, passed on August 28, could directly lead to the installation of an additional 800 megawatts of solar power, or about four times the total installed capacity in the entire state.

Most importantly, the strategy was done for the sake of economics, says Greentechmedia. Austin Energy signed a power purchase agreement (PPA) earlier this year with Recurrent Energy, a solar developer, for rock bottom prices. The five-cent per kilowatt-hour rate is one of the lowest solar deals around. The low price prompted the city council to look more deeply at solar power as a way to save on costs, which led to the most recent resolution.

Not only is solar generation becoming much more affordable, but it also acts as a hedge against fluctuating natural gas prices. Texas is still a monster when it comes to the production and generation of electricity from coal and natural gas. But with solar generating the most electricity around midday, it can shave off some of the load at times of peak demand. Austin decided to allow the Decker Power Plant to shutter as a result, an old natural gas plant that is largely used just for peak power.

The Austin city council move is also indicative of the improving trend for solar. The Wall Street Journal reports that the global solar market is finally tightening after years of oversupply. Generous support from governments in China, Germany, and the U.S. led to a dramatic expansion of solar manufacturing over the last five years. That caused prices panel prices to collapse as the world was left with a glut of solar modules.

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