Deep in the Heart of Texas, the Pandemic Threatens Renewable Energy
When you think of energy and Texas, you think of oil. But besides being the leading oil and natural gas production and refining state, Texas is also a national leader in renewable energy.
Texas is first nationwide in installed wind capacity, enough to power nearly eight million homes. Although solar fills just over 1 percent of the Lone Star State’s power needs, Texas is the fourth-ranked state for installed solar capacity. But as in other states, the economic crisis triggered by the coronavirus pandemic tempered Texas’ once-bright outlook for renewables.
Before the crisis, Texas had more than 39,000 jobs in renewables, second in the nation, according to the environmental entrepreneurs coalition E2. But the BW Research Partnership reports that in March alone, Texas lost more than 4,000 clean energy jobs, as 100,000 clean energy jobs were lost nationwide. That makes the state one of the top 10 for lost clean energy jobs.
The pandemic has threatened the Texas renewable sector in fundamental ways. For example:
- Freedom Solar, a Texas-based residential solar installer, fears supply chain disruption. Bret Biggart, the company’s CEO, told PV Magazine, “All of our warehouses and all of our locations are now filled with supplies. If we can’t get the parts that we need after burning through a month or two of inventory, we’ll have an issue.”
- Swinerton Renewable Energy planned a huge wind farm in the heart of the West Texas oil patch, until investors got cold feet because they feared the loss of federal tax credits.
The American Wind Energy Association has estimated that the pandemic threatens the jobs of almost 30 percent of the nation’s 120,000-strong wind industry workforce, tens of billions of dollars of investments, and billions more in tax and lease payments. One-fourth of all installed U.S. wind capacity – 25,000 megawatts – is at risk of not being built. Of the 6,000 megawatts currently at some stage of construction in Texas, half may be at risk, according to the most recent Energy Information Administration data.
The Solar Energy Industries Association, or SEIA, has estimated up to 250,000 lost jobs due to the pandemic. SEIA President Abigail Ross Hopper told the Associated Press, “There are many smaller companies going out of business as we speak. Up to half our jobs are at risk.” According to E2, nearly two-thirds of solar workers are employed at businesses with 19 or fewer employees.
The solar and wind industries are urging Congress to extend the federal tax credits for wind and solar and, in the near term, for direct payments to soften the financial blow to the renewable energy sector. They have had apparent success in requesting an extension of “safe harbor” provisions for renewable projects under construction so that stalled projects can qualify for federal wind and solar tax credits. On Friday, in response to Sen. Charles Grassley (R-Iowa), the Treasury Department signaled that it “plans to modify the relevant rules in the near future.”
The success of wind and solar power in Texas hinges on favorable state policy for jumpstarting the industry and allowing expansion by supporting the necessary transmission infrastructure to connect remote wind and solar farms to more densely populated urban centers.
Another strength is that wind and solar are uniquely compatible with the state’s sprawling oil industry. As state Rep. Brooks Landgraf, who represents West Texas, told the Financial Times, “Thankfully, I come from a part of Texas where we have the ability to produce hydrocarbon-based energy and solar energy and wind energy. It’s in our culture in the Permian Basin to produce energy.”
Congress must not let the renewable sector in Texas falter. The state will need to pull itself out of the pandemic-induced economic slump quickly. Wind and solar investment can readily accomplish that. It is time for Congress to shore up an industry that is critical not only to Texas’ economy but also to the entire nation’s economic well-being.