A recent headline from the Houston Chronicle caught my attention: “Residential solar installations slow in Texas as U.S. is on track for record growth.” This reflects the sentiment I’ve had over the past few months regarding the solar market.
While solar energy is experiencing remarkable growth across the globe, Texas has seen a slowdown in sales. However, it’s evident that we’re on the verge of significant progress in the state.
The primary factor hindering solar adoption in Texas has been relatively low energy prices. Although for many clients, solar still proves to be a cost-effective solution, the slightly lower electricity bills have made it less of an obvious choice.
However, the landscape is shifting. Texas is facing a substantial rise in electricity prices. This particularly challenging summer has pushed energy costs to new heights. Furthermore, the Electric Reliability Council of Texas (ERCOT) has introduced policies intended to inflate electricity prices, incentivizing major power companies to invest in gas plants within the state. As cited in a Bloomberg article, ERCOT has effectively created an “artificial scarcity of supply,” which has likely increased wholesale costs by approximately $8 billion; the agency’s CEO confirmed this to the Houston Chronicle.
While these increased costs have not yet reflected in Texans’ bills, they are expected to appear in the coming months, consequently elevating the demand for solar energy.
Additional market dynamics are also set to boost this demand. Technological advancements are playing a crucial role, with innovative minds working diligently to improve solar technology, reduce panel costs, and enhance efficiency. Solar panels are more effective and affordable than ever, especially with the recent extension of the federal Investment Tax Credit, which further enhances their appeal as an investment.
Moreover, the challenges posed by the pandemic have brought about unexpected benefits for consumers. About three years ago, our industry grappled with supply chain difficulties that resulted in severe shortages of solar panels. This prompted manufacturers to increase production, leading to a significant surplus and lower prices. As a result, solar panels are more accessible than before.
Investing in solar power comes with numerous advantages. It offers protection against blackouts, especially when paired with battery storage, an essential consideration following a summer filled with energy conservation alerts that will carry into winter. Additionally, it reduces greenhouse gas emissions that contributed to this year’s challenging summer and even enhances home values.
Now more than ever, solar energy is a viable option for a broader audience. While economic factors have previously overshadowed these benefits in Texas, economic cycles are predictable, and we are on the cusp of a favorable shift.