Texas expected to add 10 GW of solar by 2023, according to EIA

April 25, 2021

by Peter Maloney
April 25, 2021

Texas is on track to add 10 gigawatts (GW) of utility-scale solar power by year-end 2022, a surge that would represent one-third of 30 GW expected to come online in the U.S. by 2023 and would put the Lone Star State within reach of California’s lead in solar power capacity, according to the Energy Information Administration (EIA).

Texas’ solar power boom began in 2020 with the addition of 2.5 GW of capacity. The EIA’s Preliminary Monthly Electric Generator Inventory now expects the state to add 4.6 GW of solar capacity in 2021 and 5.4 GW in 2022, which will bring total installed solar capacity in Texas to 14.9 GW.

The EIA expects California to have nearly 18 GW of utility-scale solar capacity online by year-end 2022.

With 30.2 GW, Texas leads the nation in wind power capacity, and 2020 was a record year for wind power installations nationwide, but solar power installations are expected to outstrip wind installations between 2020 and 2022, according to the EIA.

The EIA expects almost half of the new generation added over the next two years in Texas will be solar power plants, surpassing wind expected contribution of 35 percent of new generation and natural gas’ expected 13 percent contribution.

The growth in solar power is being spurred by the availability of the federal Investment Tax Credit (ITC), EIA said. Utility-scale solar projects that begin construction in 2021 or 2022 are eligible for a 26 percent tax credit. The tax credit drops to 22 percent for projects that start in 2023 and to 10 percent for projects that start in 2024 or later.

The growth in solar power is also being driven by declining costs and, particularly in the Permian Basin in West Texas, plentiful sunlight. Between 2013 and 2018, average capacity weighted construction costs for utility-scale solar generation fell 50 percent while costs for wind fell 27 percent and costs for natural gas fell 13 percent, according to the EIA.

In addition, because most solar power is generated during the middle of the day when wind generation is typically lower, Texas has available transmission capacity to handle the increase in solar output, the EIA report noted.

Despite the recent growth of solar capacity in Texas, utility-scale solar still only made up 4 percent of the state’s generating capacity in 2020 and 2 percent of in-state generation, the EIA noted. Natural gas-fired generation made up 53 percent of Texas’s capacity in 2020 and 52 percent of in-state generation. Wind power comprised 23 percent of the state’s capacity and 20 percent of in-state generation.

Last November, three Texas public power cities – Bryan, Denton and Garland – entered into agreements to buy energy from a 1,310-megawatt solar plant that is expected to be the largest solar farm in the nation when it is completed in 2023.