Counties in Texas can expect to receive tax revenue of as much as US$18.8 million by locating a 100MW solar project on their land, according to a new report into the financial benefits of renewable power in the US state.
The report, ‘The Economic Impact of Renewable Energy and Energy Storage Investments Across Texas’ is authored by Dr Joshua Rhodes of the University of Texas at Austin, and backed by a number of industry bodies, including the Solar Energy Industries Association (SEIA) and Texas Solar + Storage Association (TSSA).
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Rhodes argues that, alongside the broader environmental benefits of building more renewable power and storage capacity in Texas, landowners could receive significant tax revenue for building such projects on their land, making a financial argument for greater deployments.
For instance, the report notes that Texas counties could receive US$9.4-13.1 million in abated taxes for a 100MW solar project located within its boundaries, and US$13.5-18.8 million in unabated taxes. This compares to US$16.8-20.3 million in abated taxes and US$19.7-27.9 million in unabated taxes for a wind project of the same size, making wind a slightly more lucrative proposition from a tax perspective. The report also notes that counties could benefit from US$3.8-4.7 million in taxes from a 100MW energy storage project.
There are similar benefits for landowners, who install solar and storage facilities on their properties. The report concludes that a 100MW solar farm built on the state’s south coast could deliver US$22.7-$45.6 million in lifetime landowner payments; compared to US$19.8-41 million for farms in the south, central, east and north-central regions of Texas; and US$17-36.5 million for farms in the west, north and panhandle regions.
Popular support for solar
The report also notes that renewable power projects are popular in the state, in large part due to these financial benefits. According to the report, “elected county leaders look favourably on renewable energy projects for the planning stability that comes with having confidence in consistent long-term revenue streams”.
“The growth of renewables has been a significant source of revenue for local jurisdictions and landowners across Texas, and any policy changes that reduce renewable or storage deployment in Texas will reduce these benefits, which are a lifeline to many rural communities across the state,” the report continues. “The current and expected fleet of renewables and energy storage is expected to pay almost US$50 billion in lifetime landowner payments and local taxes.”
The reference to “policy changes” is likely a warning to the new Trump administration, which has already signed a number of executive orders threatening federal support for renewable power projects through initiatives such as the Inflation Reduction Act (IRA). These immediate moves against the IRA contrast to many of the assumptions made in the weeks leading up to the inauguration, where many commenters suggested that the financial benefits offered by the IRA would protect it from being wholly repealed.
This is particularly significant in Texas, which has long been a cornerstone of the US renewable energy sector. The report notes that Texas currently has 27.2GW of solar capacity in operation, a figure only surpassed by eight entire countries, and plans to expand its operating capacity to around 68.5GW by 2028. The same is true in the storage sector, with Texas currently operating almost 10GW of energy storage, and plans to triple this in the next three years.
While wind has historically been the dominant renewable energy source in Texas – in Q2 2024, wind power met 28% of the demand of the Electric Reliability Council of Texas’ (ERCOT’s) electricity demand, ahead of solar, which accounted for 10% – the report expects the state to commission more than four times more solar capacity than wind in the coming years. As of November 2024, there was 155.6GW of solar capacity in the ERCOT grid connection queue, compared to 35.3GW of wind capacity.
