Economists expect that the development of solar and wind farms nationwide will slow and electricity prices will rise in the coming decade because of significant rollbacks to tax credits that benefited those industries, in addition to other economic uncertainty.

Texas, which has built more wind power than any state and is a top contender for the most solar power, faces this projected slowdown as grid operators predict soaring electricity demand.

Energy analysts have noted that an unusually high number of solar and battery projects in the state were already canceled or paused in the months leading up to the tax credit cuts because of uncertainty over how deep the cuts would be and the specifics of tariffs that would raise the price of steel.

From battery manufacturing in Brookshire to a solar product facility in Stratford, advocates worried that billions in announced investment and tens of thousands of planned jobs might get killed as project economics change.

In addition to having ample good places to develop solar and wind projects, the electricity market is deregulated, meaning energy producers compete to provide cheap power. Combined with a relatively quick process to connect to the grid and a simpler permitting regime than other states, Texas set the stage for wind, solar and battery power to succeed.

Wind power began taking off here in the mid-2000s. Solar power started picking up about a decade later. The amount of utility-scale solar farms built in Texas jumped from about 5 gigawatts in 2020 to 27.5 gigawatts by the end of 2024, according to a study from Columbia Business School.

Cheaper and quicker to build than gas-fired plants, Texas’ wind and solar buildout made it the “advanced energy capital of the country,” said Matthew Boms, executive director of the Texas Advanced Energy Business Alliance.

In 2022, Democrats in Congress passed the Inflation Reduction Act, or IRA — a landmark climate law that expanded tax credits for clean energy companies and consumers alike in an effort to generate more energy, create new jobs in the sector, establish renewables manufacturing in the U.S. and bring down energy costs.

The expanded federal subsidies created all sorts of cost savings, including for manufacturing items like solar panels and electric vehicles, improving home energy efficiency and building an array of clean energy technologies.

Companies have invested over $62 billion in clean energy projects across the state since the passage of the IRA, according to the Clean Investment Monitor, a project from research organization Rhodium Group and MIT to track clean energy investments. Much of the investment has gone to Republican districts represented by members who voted against the bill, including the Houston exurbs, the Panhandle, the Permian Basin and southwest Texas.

The renewables growth brought much-needed power to the state’s electric grid as demand rose. The state grid serves the majority of Texas and, unlike grids on the eastern and western halves of the country, largely stands alone.

The Electric Reliability Council of Texas, which operates the grid, repeatedly called for residents to conserve energy amid record-breaking heat in the summer of 2023, but the new solar farms helped to meet the high demand. A report from the Federal Reserve Bank of Dallas found solar power and batteries made a difference in keeping the grid running in summer 2024 too, without any conservation calls.