West Texas is known for its pumpjacks, big trucks and sprawling flatness.
As a state, Texas is first in the nation for wind power, with wind farms producing more than 12,000 megawatts of electricity, almost 10 percent of Texas’ electricity and enough to power more than 3 million homes, according to the American Wind Energy Association.
But while wind has flourished, solar energy has floundered, generating less than 150 megawatts of electricity throughout the state, even though Texas being rated No. 1 by the Texas State Energy Conservation Office.
Despite the slow growth of solar, the sun may be peeking through the clouds for the industry as the price drops and the market responds favorably to the power generation.
“Utility scale solar over the years has really been, for the most part, rather cost-prohibitive,” Robbie Searcy, Electric Reliability Council of Texas spokesperson told the Reporter-Telegram. “That has been changing and the costs have been coming down considerably in the past decade.”
ERCOT is the primary supplier of energy to more than 23 million residents in Texas and has created a competitive market for electricity generation. Wind power has been in the market over the past few decades, while solar is only getting a start.
One such company that is looking to enter the market is First Solar. Its Barilla Solar Project finished its first phase, a 18-megawatt section of panels, in Pecos County in September. The plant could be increased to upwards of 150 megawatts if it is deemed successful.
Colin Meehan, the director of regulatory and public affairs at First Solar, said that the Barilla project has been made possible by falling costs in the solar industry.
“The main hurdle has really shifted or eroded over the last few years which is … that solar was expensive and not cost-competitive,” Meehan told the Reporter-Telegram. “That probably was the case up until a few years ago. But we’re now at a place where a new solar power plant costs usually less than a new natural gas power plant, and that’s a tectonic shift that still hasn’t been felt through the whole marketplace.”
Meehan attributed the drop in the price of solar to China entering the global market, creating solar-grade silicon en masse. This influx of material dramatically lowered the price for traditional silicon-based solar panels, fueling the growth of the industry in other places.
Meehan also stressed that while the capital investment for a solar plant is similar to that for a gas- or coal-powered plant, the solar versus fossil fuel debate diverges drastically from that point.
“Whenever you want more power out of that power plant, you have to feed it more fuel, which has a significant cost,” Meehan said of the differences between the power plants. “That’s not the case for solar. That alone has a huge impact on our operating costs and making us more competitive with these other plants. At the same time in terms of the maintenance, there really isn’t a whole lot of maintenance. Frankly, one of the advantages of solar is that we don’t always need people on site 24 hours a day. We can manage and do manage a lot of our power plants centrally.”
Price of solar still seen as prohibitive
While Meehan sees the price of solar coming down, the history of high prices paid for solar still lingers in many people’s memories.
“In the past we have purchased renewables where the timing in the market wasn’t right and the technology wasn’t mature, so we bought it at higher prices,” said Carlos Cordova, spokesman for Austin Energy, the utility that provides electricity to most of the city of Austin. “So right now, while we have been able to acquire renewable energy and solar at some good prices, renewable energy overall is still not cheaper than traditional generation when you look at all of our sources. Also, you get more value from say, a natural gas power plant.”
The city of Austin has the goal of having 35 percent of its electricity powered by renewable energy by 2020. Solar has helped the city meet its goal early by providing the last 150 megawatts of renewable energy in the form of a yet-to-be-started solar project by San Francisco-based Recurrent Energy.
But solar will make up less than 5 percent of Austin’s consumed energy, while wind will account for almost 30 percent and gas 42 percent. Coal, which has seen its share decline, will provide Austin with more than 9 percent of its power.
Cordova emphasized that while Austin is making aggressive moves to increase the amount of renewable energy in its portfolio, the switch is being made gradually and as coal power is pushed out, gas-powered plants are being used to fill in the gaps as a more reliable energy source.
“What we’re proposing as a utility is to be able to continue to use natural gas to help us get to these aggressive renewable energy goals, because if you shut down all of your natural gas plants and all of your coal plants, the only way you can meet these other aggressive renewable energy goals is by really impacting your customers’ rates,” Cordova said.
Infrastructure improvements help spur growth
While renewables such as wind have grown exponentially in West Texas, so has the power-hungry oil industry. With the shale boom in full swing, congestion in aging electrical infrastructure has increased prices, according to multiple sources spoken to for this article.
One of the solutions to this has been the creation of the Competitive Renewable Energy Zones by the Public Utility Commission of Texas, which injected more than $7 billion into upgrading and increasing the power grid in West Texas, according to Searcy. A recent announcement by energy distributor Oncor said that the company would pump more than $1 billion into upgrading and extending its energy infrastructure in West Texas of the next four years.
While these improvements may be geared toward the oil and wind industries, solar may benefit from these improvements by having improved transmission lines near their optimal locations that are located further west from the wind farms.
“Based on the studies that we see coming through our interconnection process here at ERCOT, it looks like we are seeing a lot of projects being considered,” said Searcy of an increase of studies into more solar plants in Texas. “To that end, while not all of those projects will actually get built, I think it’s fair to say that there will be growth beyond the less than 200 (megawatts) of solar that we currently have in the ERCOT region.”
For First Solar, the ability to set up their Barilla project in nine months has allowed them to respond to the Basin’s energy needs.
“One of our advantages is that we can build very quickly in response to (power demand), and for us that means that we’re able to get more revenue than we might in say, San Antonio, where electric prices are very low, and at the same time we can lower prices for the consumers whether it be the oil facilities or the actual residential customers,” said First Solar spokesperson Meehan of Barilla’s ability to meet the Permian Basin’s energy needs.
One of the biggest issues that differentiates solar and wind is that solar farms cover acres of land while wind has a minimal footprint. In an area full of mineral rights and oil potential, this has been a concern for those looking to maximize their resources. While Meehan said this is a challenge for solar power plants, the maneuverability of solar panels can make it as good a fit out in West Texas as wind farms.
“In some cases I think this is one of those things where some mineral rights owners still aren’t really familiar with solar and the industry, and maybe they have some concerns,” said Meehan of the land issue. “But when we’ve sat down with them we found that it’s really easy to figure out a layout that allows them the access they need while not increasing our cost of development at all and still providing the land owner with the full solar value that they’d be looking for.”
And while bringing solar to West Texas is an issue, the long-winded development of solar continues to hamstring its growth in new markets like the Lone Star State.
“I think in solar what we’re seeing right now is an open-minded kind of skepticism,” said Meehan of people’s response to solar farm proposals. “I think people have been talking about solar for so long that some folks out there, especially if they’re not familiar with the industry, are fairly skeptical that it’s ever going to be real and that it would ever make sense for them to go solar for one reason or another.”