Texas takes shine to solar power
Texas has long been home to Big Oil companies that specialize in
extracting petroleum from hard-to-reach places. Now the hip college town
of Austin is vying to become the epicenter of a potentially giant market
for carbon-free electricity generated by the hot Texas sun.
The rest of Texas may follow, if the state legislature passes
incentives that will change the economics of buying panels from hippie
cool to low-price hot.
Big US solar companies like SunPower Corp., born in California's
Silicon Valley and nurtured on that state's renewable-friendly
incentives, are looking to Texas as the new frontier for U.S. solar
deployment.
Texas, the second most populous state behind California, is the hub
of the U.S. energy sector. Traditional oil companies like Exxon Mobil
and ConocoPhillips call it home, but it also claims the mantle as the
top U.S. producer of wind power.
"It's a natural combination to think about Texas as being ultimately
one of the largest if not the largest, solar market in the country,"
said Julie Blunden, executive vice president for public policy and
corporate communication at SunPower.
Earlier this month, SunPower, California's biggest solar company,
committed to opening an Austin office that will house 450 employees.
Texas could one day eclipse California to become the biggest U.S. solar
generating state, Blunden said.
"Texas is huge," said Michael Horwitz, senior research analyst for
clean technology at Robert W. Baird & Co. SunPower has a strong solar
marketing record and "it makes sense that they will be one of the first
players to break into that market," Horwitz said.
Texas has plenty to offer. It's home to the biggest US electricity
market, and as anyone who has visited the state during the summer knows,
there is plenty of sun.
Texas "has virtually unlimited solar energy supply" and ranks first
among US states in solar resource potential, according to the U.S.
Energy Department.
That potential is mostly untapped today. California is the No. 1 U.S.
solar producer, thanks in large part to over $2 billion in incentives
and laws that require utilities to get 33 percent of their electricity
from renewable sources by 2020, says Aaron Chew, an analyst at Hapoalim
Securities.
Texas doesn't even make the Top 10.
That could change if the Texas legislature acts next year on
proposals that would require state utilities to buy solar generation and
offer $500 million in rebates over five years to residences and
businesses to install solar panels. "These incentives will light the
fire under it, touch the match and light the fuse," said Russel Smith,
executive director of the Texas Renewable Energy Industries Association
in Austin. "It's going to be like the (Texas) wind sector if you do it
right." Texas solar deployment has been a piecemeal, city-by-city effort
so far. Austin has set a target of 35 percent renewable energy by 2020,
and Austin Energy wants to see the solar target doubled to 200 megawatts
over the period. San Antonio has set similar goals.
Without state-wide rules, Texas solar proponents say, the industry
could languish in a patchwork of local efforts.
"For the private sector to get off the dime and really do what
private capital can do, which is to take the lid off this thing, the
legislature will need to do something," said Andrew McCalla, president
and founder of Meridian Solar Inc., which designs, builds and installs
solar installations.
Even without such incentives the Texas solar market is showing signs
of life. The state's first solar farm began operations in November, a
14-megawatt project in San Antonio.
That would power about 14,000 homes if the sun was shining full
strengh all the time - or about 5,000 in normal conditions.
And on December 15, RRE Austin Solar broke ground on a 60-megawatt
solar farm northeast of Austin. A streamlined permitting process was key
to drawing RRE Austin to Texas, said Angelos Angelou, a consultant for
the privately held company.
"From a timing point of view Texas offers significant advantages over
any other state," Angelou said. While obtaining key permits in
California takes years, the Texas grid operator approved a connection
permit in about seven months, he said. Texas solar projects are dwarfed
by large-scale California solar farms like the planned $6 billion,
1,000-megawatt Blythe solar project in the Mojave Desert, which could
power roughly 300,000 homes at peak when it comes online in 2013.
Texas Governor Rick Perry has vociferously opposed federal
regulations to curb carbon dioxide. But if the U.S. Congress ever acts
on long-delayed carbon legislation, solar projects could be key for
Texas, which emits more heat-trapping gases per capita than any other
state.
The Nerd Bird If Texas has a solar boom, Austin would be a logical
host.
It's known as the "Silicon Hills" - a nod to California's Silicon
Valley - due to its high-tech roots. Austin, Texas, Reuters
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