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The Texas Solar PV Market: A Competitive Analysis
A U.S. Clean Energy Leadership Index Custom Report
This report, commissioned by a private State Clean Energy Leadership Index subscriber, aims to provide insight about solar PV energy in Texas, including market share, overall investments, R&D, job creation, policy landscape, and other key measures. Data and analysis compares solar activity in Texas against five other leading solar PV states: California, New Jersey, Arizona, Colorado, and New Mexico. The report is built on research and analysis contained in Clean Edge’s State Clean Energy Leadership Index.
Texas made it into the Top 10 states for solar PV installations in 2010, but just barely. Its 25.9 megawatts (MW) of installations put it in 10th place, far behind such solar leaders as #1 California (252 MW), #2 New Jersey (132.4 MW), and #3 Nevada (65.3 MW).
U.S. grid-connected PV installations grew an astounding 103 percent last year, from 435 MW in 2009 to 882 MW in 2010. In a world of increasingly low-cost solar and supportive policies in select states, many analysts predict continued high-growth rates in the U.S., with some projecting another doubling of new installed capacity in 2011. However, while Texas added 25.9 MW in 2010, bringing its total installed capacity up to 34.5 MW, it still trails the other states compared in this report, most by significant margins. Currently, the top 10 states for cumulative installed PV capacity in the U.S. include five of the states evaluated in this report – California (#1), New Jersey (#2), Colorado (#3), Arizona (#4), and New Mexico (#10). Texas doesn’t make the top 10 list, coming in at #13.
An additional barometer of a state’s overall technology leadership comes in the form of venture capital activity, which primarily represents equity investments in early-stage companies. Of the six states compared in this report, California is the clear solar venture investment leader. Between 2008 and 2010, California-based companies racked up nearly $4 billion in solar VC investments, reflecting the state’s high concentration of solar development and activity. The next closest state, Colorado, came in second with $264 million in solar venture investments and Texas came in third with $78 million in venture investments related to solar thin-film manufacturing, advanced cell and module design, and concentrated PV technology development.
While solar jobs exist in all 50 states, California is the leader with approximately 36,000 solar jobs and more than 1,000 solar companies, or 30 percent of all solar firms in the U.S. Texas ranks third, behind second place Pennsylvania (6,700 jobs), with approximately 6,400 solar jobs. Yet despite its current strong standing, Texas has substantial room for growth. Only .08 percent of the total Texas labor force is currently employed in solar jobs – compared to .30, .29, and .20 percent in California, Colorado, and Arizona respectively. If Texas were to reach par with other leading states in terms of solar jobs market share, thousands of additional Texans could be employed.
In looking at solar policy, Texas is the only state reviewed that lacks net metering and solar rights provisions. According to DSIRE (Database of State Incentives for Renewables and Efficiency), Texas is also the only state reviewed with an unknown or unclear status for third-party solar PV power purchase agreements (PPAs). Regarding net metering, Texas offers volunteer utility programs, but this is not as strong as the unlimited capacity net metering programs established in Arizona, Colorado, and New Jersey and the 80 MW limit in New Mexico. On the financial incentives side, Texas does provide loans of up to $5 million for energy-cost-reduction technology deployment, including solar PV, for schools, local governments, state government, and hospitals via its LoanSTAR revolving loan program. Of the six states covered in this report, Colorado is the only other state with a loan program (intended for commercial, industrial, and non-profit organizations). Below is a detailed breakdown of the RPS in the compared states:
Amongst the states tracked, on a levelized basis, Texas was at or near the bottom of the pack in all of the solar indicators Clean Edge reviewed. Although it is currently underperforming, the report found that Texas is in a strong position to leverage a range of unique assets including existing technical infrastructure, research expertise, and a rich history of energy leadership. However, the state would need to pursue strong public and private action to exploit the solar PV opportunity.