Texas renewables industry sees defeat of key bills as legislative victories

The Texas renewables industry applauded the end of the state's legislative session and, with it, the defeat of four major bills that could have placed significant restrictions on clean energy investment.

"Texas is the energy capital for a reason, and by refusing to wrap clean energy generation in red tape, Texas state leaders just showed us why," Solar Energy Industries Association President and CEO Abigail Ross Hopper said in a statement June 2, one day after the Texas Legislature's session concluded. "Simply put, the economic reality and math of energy demand prevailed in Austin, and that is a good thing for Texans' energy bills, the economy, and grid reliability."

Three bills opposed by the renewables industry passed the Senate but went no further. Senate Bill 819 would have required, among other permitting limits, setbacks for wind and solar projects. SB 388 would have required that half of new generation within the Electric Reliability Council of Texas Inc. be sourced from dispatchable sources, excluding batteries. SB 715 would have moved up the dates that new generation reliability requirements, passed in 2023, would have taken effect.

SB 383, which would have prohibited offshore wind resources from interconnecting to the ERCOT grid, passed the Senate and the House State Affairs committee but was not called for a vote in the full House.

A bill similar to SB 819 was introduced during the 2023 session, but did not get much support, Kat Gamache, a partner at Norton Rose Fulbright, said in an interview after the bills passed the Senate. Gamache focuses on regulatory issues, and her clients include independent power producers and project developers.

"It didn't have the traction that it seems these bills have," Gamache said. "[These] passed so widely in the Senate, and that's really surprising. I think that's catching people's attention. ... The fact that they so easily passed the Senate is concerning."

The state's legislative session runs 140 days every other year, so it will not meet in regular session until January 2027.

Bill passage

Several bills supported by the renewables industry and environmental groups did clear the Texas Legislature, including, most notably, SB 6, which addresses how ERCOT will manage new large load customers. Public Utility Commission of Texas Chairman Thomas Gleeson characterized SB 6 as one of the most important bills in the session.

The Lone Star chapter of the Sierra Club supported SB 6 because of the "important transparency and consumer protection language in it," Cyrus Reed, the group's legislative and conservation director, told Platts, part of S&P Global Energy.

Texas Gov. Greg Abbott has not indicated whether he plans to sign the bill.

"The governor will thoughtfully review any legislation sent to his desk," Andrew Mahaleris, Abbott's press secretary, told Platts in an emailed statement.

SEIA also backed three bills that passed that are aimed at strengthening homeowners' ability to choose solar and storage. SB 1202 aims to streamline installation of home backup power systems, such as solar and storage. SB 1036 aims to prevent fraudulent and predatory residential solar panel sales practices by requiring state registration, licensing and regulation. SB 1697 requires the PUCT to develop an online guide to home solar energy devices as a resource for customers.

"SB 1036 and SB 1697 will ensure that Texans interested in investing in rooftop solar are able to make informed transactions with responsible companies," Hopper said.

Lawmakers also passed SB 1252, which removes municipal authority over the installation and inspection of backup energy resources under a certain size. Proponents of the bill say it will streamline the permitting process for distributed resources, including battery storage.

Texas has installed more solar and storage capacity than any other state since 2023. About 30,000 customers in the state currently have rooftop solar, the third-most of any state, according to SEIA.

The Sierra Club supported SB 783, which allows the State Energy Conservation Office to proceed with a rulemaking process to adopt the 2021 International Energy Conservation Code, an update from the 2015 rules under which Texas currently operates. The law, which was enacted without the governor's signature, takes effect Sept. 1.

HB 5323, also backed by the Sierra Club, creates the Texas Energy Waste Advisory Committee to help identify ways to increase energy savings and demand response, Reed said. HB 5323 awaits action by the governor.

Luke Metzger, executive director of advocacy group Environment Texas, characterized the 2025 legislative session as an overall net positive for the environment.

"Our first recommendation to legislators is, 'Do no harm,'" Metzger said during a June 4 news conference, "Especially when it comes to Texas's booming renewable energy sector."

Energy, nuclear funds

Lawmakers also allocated another $5 billion to the Texas Energy Fund, fully funding its four programs: the In-ERCOT low-interest loan program; the completion bonus grant program; the outside of ERCOT resiliency grant program; and the backup power program, which encourages generation and storage systems, including renewables, at critical facilities.

In a push to advance nuclear development within the state, lawmakers also passed HB 14, creating the Advanced Nuclear Office, and allocated $350 million in the state's final budget to encourage nuclear plant construction.

Abbott lauded the bill's passage and said he would sign it into law.

"Texas is the energy capital of the world, and this legislation will position Texas at the forefront of America's nuclear renaissance," Abbott said in a June 2 statement. "By creating the Texas Advanced Nuclear Energy Office and investing $350 million — the largest national commitment — we will jumpstart next-generation nuclear development and deployment. This initiative will also strengthen Texas' nuclear manufacturing capacity, rebuild a domestic fuel cycle supply chain, and train the future nuclear workforce."

In August 2024, Abbott created the Texas Advanced Nuclear Reactor Working Group within the PUCT. The group released a plan to build an advanced nuclear power industry in Texas to enhance reliability.

Federal policy priorities

With the state's legislative session in the rearview mirror, the Texas renewable industry is focused on federal policy.

In May, 50 solar and storage companies headquartered or with operations in Texas sent federal lawmakers a letter asking them to preserve various renewable tax credits enacted under the 2022 Inflation Reduction Act.

"The 45X manufacturing tax credit is critical for building domestic manufacturing facilities and jobs, working in conjunction with incentives in the 48E/45Y tech-neutral and 25D residential energy tax credits to build strong market demand," the letter said.

The 600 solar and storage companies across Texas have been able to thrive because of existing federal policy support, the letter said.

S&P Global Market Intelligence data shows 26,750 MW to be added in the ERCOT market this year, with about 12,300 MW from solar, 11,800 MW from storage and 2,200 MW from wind. According to ERCOT, the region already has about 40,000 MW of installed wind resources, 30,600 MW of installed solar resources and 11,200 MW of installed solar resources.

The enactment of a US House-passed tax reconciliation bill without changes could trigger the closure or cancellation of 51 storage facilities in Texas, according to a SEIA analysis.