{"id":376584,"date":"2025-04-26T20:33:46","date_gmt":"2025-04-26T18:33:46","guid":{"rendered":"https:\/\/climatescience.press\/?p=376584"},"modified":"2025-04-26T20:33:47","modified_gmt":"2025-04-26T18:33:47","slug":"subsidized-solar-in-texas-perpetuates-itself-itc-ptc-need-immediate-elimination","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=376584","title":{"rendered":"Subsidized Solar in Texas Perpetuates Itself (ITC, PTC need immediate elimination)"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From Master Resource<\/a><\/p>\n\n\n\n

By Robert Bradley Jr.<\/em><\/p>\n\n\n\n

\n

\u201cDo not dare say that Texas is \u2018deregulated\u2019 or the free market or \u2018competition\u2019 failed in the Lone Star State. All of the state and federal laws [listed] need to be repealed<\/em> where the owners of assets gain control of them\u2013and customers make voluntary transactions with government out of the picture\u2026.\u201d<\/p>\n<\/blockquote>\n\n\n\n

Doug Sheridan<\/a>, a top energy analyst with a large social media footprint, noted<\/a> the dirty hidden secret behind Texas\u2019s beleaguered grid.<\/p>\n\n\n\n

When we examine the cost of solar energy, we assume all energy comes from new assets built at current costs. Those assets are assumed to power a hypothetical grid in a US region rich in both natural gas and sunlight.

The results of the analyses show a breakeven cost of generation of $54.24 per MWh for a 100% newbuild gas-fired system. Each 10% market share increment captured by newbuild solar raises the system breakeven by $3.21 per MWh. At 50% solar penetration, the breakeven reaches $70.39 per MWh. The findings highlight the economic challenges of solar energy.

The real-world offers an even bleaker picture, however. That\u2019s because new solar power is, in reality, being added to grids already being served by older, existing gas-fired generation. The large influx of incremental new solar capacity is lowering wholesale energy prices and forcing these older gas-fired assets to the back of the line.

Okay, so what\u2019s the problem?

Well, these older gas-fired assets were built under the expectation they\u2019d be given a fair shot at achieving sufficient returns over their operating lives. The rules changed when solar power, boosted by subsidies and regulatory favoritism, came into play.

Today, subsidized solar captures a large share of volumes and revenues on many systems, leading to much lower returns for gas-fired generation. With no way to reverse their investment decision, older plants must simply accept whatever price they can get in oversupplied markets. For now, this cannibalization of legacy assets is keeping a lid on wholesale prices. In the long run, however, it will only push prices up as legacy assets retire and systems become laden with too much of the wrong kind of capacity.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

This erosion of gas-fired generation\u2019s economics rarely makes the news. Yet, its impact is clear on systems like ERCOT<\/a>, where solar capacity is growing quickly. Gas-fired project developers once felt confident in Texas. Now, they hesitate to invest on a system where their financial prospects are uncertain. It\u2019s totally understandable.

Even the $10B Texas Energy Fund, which offers subsidized loans for new gas-fired projects, is seeing developers unable to come to terms (two more just this week). Our guess is developers distrust the state\u2019s poor record on regulatory and economic fairness. Having poisoned the well for dispatchable gas-fired generation to such a degree and for so long, the Texas grid now faces an increasingly risky future when it comes to reliability and affordability.

It\u2019s clear subsidized solar is disrupting grid economics and threatening reliability on systems like ERCOT. If history is any indication, Texas officials will attempt to hide the damage, or blame it on demand growth, instead of tackling the issue head on. Bad idea. The longer policymakers allow time-tested dispatchable generation to be undermined on ERCOT, the worse the outcome will be for Texans.<\/p>\n\n\n\n

Sheridan added<\/a> in a comment:<\/p>\n\n\n\n

A slow-motion train wreck that Texas officials will attempt to claim was caused by demand growth rather than bad policy and poor management. You watch.<\/p>\n\n\n\n

Comment<\/strong><\/p>\n\n\n\n

Electricity is arguably the second most regulated U.S. sector next to money and banking. The Federal Power Act of 1935, Public Utility Regulatory Policies Act of 1978, Energy Policy Act of 1992, Inflation Reduction Act of 2022, Texas Public Utility Regulatory Act of 1975, Texas Public Utility Regulatory Act of 1995, Texas Electric Restructuring Act of 1999\u2026.<\/p>\n\n\n\n

The Federal Energy Regulatory Commission (n\u00e9 Federal Power Commission), Security and Exchange Commission, Public Utility Commission of Texas, Electric Reliability Council of Texas, North American Electric Reliability Corporation, National Association of Regulatory Utility Commissioners\u2026.<\/p>\n\n\n\n

So don\u2019t dare say that Texas is \u2018deregulated\u2019 or that the free market or \u2018competition\u2019 failed in the Lone Star State. All of the above laws need to be repealed<\/em> where the owners of assets gain control of them\u2013and customers make voluntary transactions with government out of the picture except for keeping the peace (explained here<\/a>).<\/p>\n\n\n\n

Time to think big\u2013big free markets!<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Doug Sheridan, a top energy analyst with a large social media footprint,\u00a0noted\u00a0the dirty hidden secret behind Texas\u2019s beleaguered grid.<\/p>\n","protected":false},"author":121246920,"featured_media":376588,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691826368,691834739,691818267,691818299,691818577],"class_list":{"0":"post-376584","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-ercot-electric-reliability-council-of-texas","9":"tag-gas-fired-projects","10":"tag-solar-power","11":"tag-subsidies","12":"tag-texas","14":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/04\/0texas-flag-hsqxp1byh6d1yx62.jpg?fit=1920%2C1081&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1zXW","jetpack-related-posts":[{"id":280997,"url":"https:\/\/climatescience.press\/?p=280997","url_meta":{"origin":376584,"position":0},"title":"Texans Left Scrambling For Power As Wind Turbines Take Another Summer\u00a0Vacation","author":"uwe.roland.gross","date":"29\/09\/2023","format":false,"excerpt":"Texas is littered with solar panels and wind turbines, but don\u2019t expect them to deliver power as and when you need it. 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