Texas has been an oil and gas state for decades. One of the reasons the economy in the Lone Star State is so strong is the establishment of numerous oil and gas operations, ranging from extraction operations at wells installed around the state to refining facilities that turn raw oil and gas into different products.
Texas has developed a reputation as an energy powerhouse in part because of those natural resources and the strong presence of the oil and gas industry. People have also begun to pay attention to the boom in renewable energy across the state. Texas sees quite a bit of wind and is also very sunny. As a result, Texas has understandably invested significantly in renewable energy. Wind and solar power were the source of 0.7% of the electricity used in Texas in 2002, but they represented 26% of the state’s electricity in 2022.
However, lawmakers in Texas have started pushing back on renewable energy and refocusing on oil and gas. Do property owners and businesses hoping to invest in renewable energy have to worry about changing state rules?
Tax credits and other financing support maybe come harder to access
Historically, both the state of Texas and the federal government have offered tax credits and other financial incentives to help and defray the costs associated with the installation of solar electrical systems or wind turbines. As solar production and wind energy production have increased, lawmakers have begun focusing once again on the needs of those involved in the oil and gas industry and are less likely to consider the needs of those producing renewable energy.
When a state lawmaker proposed a school tax exemption for certain solar and wind farms to mirror a decades-long program offering similar tax breaks, they met strong opposition. Lawmakers pointed to the state’s leading role in wind energy production as a sign that more state tax breaks and investments in such operations aren’t necessary.
This change in attitude could impact the tax obligations of renewable energy operations and could, therefore, diminish how profitable they are. Tracking changes to state incentives for renewable energy may benefit those who are looking to invest or already operating renewable energy production facilities in Texas.
