Texas Solar Market Is Booming—And CCR Is There
August 31, 2016
Right now, with 534 megawatts of installed capacity, the Solar Energy Industries Association (SEIA) ranks Texas at number ten in the nation for solar. And while the Lone Star State currently gets most of its energy from natural gas and coal, there are a number of factors indicating that installed solar capacity is only going to go up. Texas will soon be a solar powerhouse. In fact, the Electric Reliability Council of Texas (ERCOT) predicts that 17% of Texas power will come from solar by 2031 (that’s compared to about 1% today).
Here is part one in our two-part series examining some of the factors driving Texas solar:
Texas Is a Deregulated Energy Market
To understand the importance of deregulation in the move to solar, we first need to understand the terminology. Let’s look at the difference between regulated and deregulated markets.
In a regulated energy market, utility companies are essentially government-regulated monopolies—there is one utility servicing a particular area, and consumers don’t get to choose. If they want electricity, they have to buy it from the one company authorized to service their area. To protect the interests of the consumer, these utilities are regulated by some iteration of a state public utility commission. The job of the commission is to balance the needs of the utility (to be profitable) with the needs of the consumer (to not be price gouged).
Generally, utilities in this landscape are vertically integrated (which means they own and operate each stage of energy production, procurement, transmission and delivery), and no new utility or energy-producing entity can open up shop and start selling energy to individuals and businesses. In this type of business environment, government oversight of utilities and pricing is supposed to offset the lack of choice and competition in the marketplace.
On the other hand, a deregulated market, such as Texas, is a market in which there is more than one entity providing utility services to an area. Qualifying companies can open up shop and provide energy to consumers in the manner of any unregulated utility (think cell phone or satellite television companies). These companies can be Retail Energy Providers (REPs) or they can be energy developers who work with a REP to get their power to the end user. According to the Texas Public Utilities Commission, depending on the situation, a REP can purchase and sell electricity directly to the consumer, it is responsible for billing the customer and it is required to manage a working relationship with a Transmission Distribution Utility (TDU) to ensure the delivery of said electricity via the existing grid. A solar developer, like Cypress Creek Renewables, can enter into an agreement with a REP in which it sells electricity to the customer, but the customer maintains a billing relationship with their REP.
Deregulated markets give consumers more choice—which means better service—but it also means more price fluctuations. Historically, fossil fuels have dominated the energy production landscape, and this has resulted in rates that may peak and valley in the short term. But, over the long term, they always move in an upward trajectory.
Fixed Prices for Years into the Future
In places like Texas, this deregulation has resulted in a market in which solar developers can come in, build farms and then work with a REP to sell clean energy directly to the consumer. Aside from the fact that this energy is both clean and renewable, one of the major benefits of this opportunity is that the price for solar can be fixed.
Unlike coal or natural gas, the procurement of which is always unpredictable and resource intensive (resources being money, time, labor, water, etc.), the generation of solar energy is a fairly reliable endeavor. If the sun’s out, the panels are converting the rays into electricity—simple as that. And after the development is built, it’s also a fairly inexpensive endeavor. Photo-voltaic panels need a little dusting every couple of months, the property needs a little mowing and someone needs to come around to make sure the farm is quietly generating power like it’s supposed to.
Because of solar’s predictability and consistency, a solar energy developer—like Cypress Creek Renewables—can offer renewable power to the homes and businesses in the region at fixed rates for up to five years into the future. To compare, a standard utility typically won’t offer fixed rates for more than one to two years at a time.
Cypress Creek Renewables Solar Farms Make Good Neighbors
Cypress Creek Renewables solar developments are quiet, clean and unobtrusive. Our projects are built under the oversight of local and state building and electrical codes, and the solar PV panels are composed of non-toxic materials that do not erode or produce any emissions. Once built, the farm is monitored remotely, which means there is no increase in daily traffic to and from the site. There’s no emissions or voluminous water usage like at a coal plant. There’s no potential danger like at a nuclear plant. There’s just clean solar energy uploaded to the grid and delivered to local Texas homes and businesses. It doesn’t get much better than that!
Watch for Part II in our Series on Texas Solar
Deregulation is of major importance, but there are other factors influencing Texas’ move to solar as well. Stay tuned for part two of our series on Texas solar, where we’ll look at the impacts of regional haze, solar installation cost drop and people’s choice.
Read More from the Cypress Creek Renewables Blog: