Texas Relies on Solar, Dallas Fed Says

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

Tax credits for renewable energy are expiring, and U.S. political support is squarely behind fossil fuels. The Federal Reserve Bank of Dallas said that solar still shines in Texas, however.

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Solar Gains Traction

Texas managed to install as much solar power capacity to its grid last year as it did in 2024, despite the lack of federal support and with the additional pressure of tariffs, the Federal Reserve Bank of Dallas found.

Despite the range of headwinds, the Dallas Fed said utility-scale solar power will remain an important source of energy for the grid in Texas for years to come.

Texas is the top state for utility-scale solar power generation. Industrial Info is tracking 25 solar projects in the state in the construction phase with a high probability of completion that are worth an estimated $9.5 billion. Greenalia Power U.S. is behind the largest of those, with a $1.04 billion project slated for Childress, Texas.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more about solar projects in Texas--including capacities, investment values and necessary equipment--in this comprehensive list.

"However, developers of new solar projects face a changing operational environment, one lacking strong federal policy support but also featuring cost-boosting tariffs on imported solar cells and modules," the Dallas Fed warned.

U.S. President Donald Trump said last year that his administration would no longer approve new wind or solar projects nationally. Decrying the intermittent nature of renewables, the president in August complained that solar facilities were taking up too much land.

Federal estimates, however, show solar remains a viable resource on the domestic grid. The amount of solar power on the grid last year was 20% more than 2024 levels. By next year, the government expects solar to expand another 21%, should early-year forecasts for 2026 prove accurate.

The Dallas Fed said that conditions in Texas are prime for solar-energy development, with the Lone Star State passing green-focused California last year to become the state with the largest amount of solar capacity. California last year boasted 24.63 gigawatts (GW) of solar, compared to 30.52 GW for Texas.

"Texas, relative to other regions, benefits from factors that improve solar power's economics, notably many hours of clear, sunny skies bringing high levels of solar irradiance," the Dallas Fed said.

By the Numbers

• 8.4% of Texas power came from solar resources on Wednesday
• 2% annual decline in coal-fired power nationally
• $9.5 billion worth of solar construction in Texas

Renewables Still Keeping the Lights On

Wind, solar and hydro-electric power combine for about 25% of the electricity on the state grid, according to the Electric Reliability Council of Texas (ERCOT). As of Wednesday, ERCOT showed solar churning out around 4.6 GW, accounting for about 8.4% of the total energy on the grid.

During the latest round of severe winter weather, IIR Energy reported no issues with the renewable energy sector in the U.S. However, a handful of crude oil and natural gas pipelines saw curtailments as temperatures dropped below freezing for some parts of Texas.

The federal government noted that coal helped keep the heat and the lights on during last week's winter storm. ERCOT showed coal and lignite combined for about 15% of what's on the state grid, however.

"Looking forward, Texas will likely experience strong growth in power demand, with an increasing number of power-hungry data centers and other sources of new demand," the Dallas Fed stated. "A persistent slowdown in new solar capacity could make satisfying that growth more difficult."

Natural gas still dominates the grid, both in Texas and nationally. ERCOT showed natural gas accounting for about 38% of domestic demand, which is close to national estimates. Coal, meanwhile, accounted for 17% of the energy on the grid last year.

Key Takeaways

• Texas surpassed California in solar power capacity.
• Tax credits for renewables are expiring.
• Dallas Fed points to balanced state grid.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).