Monday, August 19, 2013

In Texas, Oil Is Big But Solar Is Cheap

Despite foot-dragging by the state’s leadership on solar policies, residential solar installation prices recently hit $3.90 per watt in Texas, lower than anywhere else in the nation. It’s part of a nationwide plunge in installation prices for the smaller systems — generally 10 kilowatts or less — used for individual homes. According to a new report out of the U.S. Department of Energy’s Lawrence Berkeley Laboratory, that national price fell from around $12 per watt in 1998 to $5.30 per watt in 2012.

Large utility-scale solar systems saw a similar plunge in installation price, hitting $4.60 per watt in 2012. But it’s the small, distributed residential systems that could fundamentally remake the electricity market in America, and have been a large part of the growing pro-solar coalitions between environmentalists and the Tea Party. Granted, residential solar is still a relatively small slice of national capacity, but it’s also been the least sensitive to seasonality and market volatility.

And according to the Lawrence Berkeley Laboratory report, of all the states with measurable observations of 15 or more, Texas clocked in with the lowest median price of $3.90 per watt.


CREDIT: Lawrence Berkeley National Laboratory & US Dept. of Energy

Garrett Gordy, the owner of Texas Solar Outfitters in Houston, told the Houston Chronicle that he’s sold 10-kilowatt systems for as low as $3.60 per watt. At that price, after accounting for various tax incentives, such a system would pay for itself within 12 years.

That’s especially impressive because Texas is a decidedly mixed bag when it comes to policies to promote solar. There are a number of federal policies in place, but the state government hasn’t passed any tax incentives for solar, or rebate policies to encourage individuals or families to generate power and sell it back to the grid. Retail electricity providers can voluntarily engage in net metering with customers through the Green Mountain Energy program, but that’s it. Texas does allow for third party leasing agreements, one of the financial innovations that’s driving the solar boom in America, and it has a renewable portfolio standard — though it only requires about 5 percent of the state’s power to be drawn from renewables by 2015. Most of the really encouraging solar policy in Texas actually occurs at the local and municipal level, particularly the city of Austin.

Meanwhile, Texas’ Republican Governor Rick Perry and the GOP-controlled state legislature largely refuse to even acknowledge the existence of manmade climate change, despite Texas’ spiraling water problems, and climate-driven blows to its beef, rice, and cotton industries.

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