Texas was originally powered largely by renewable fuels: water, wind, and biomass. But those inefficient means of energy production were quickly replaced by more efficient coal and kerosene, and later by gasoline, aviation fuel, natural gas, and nuclear power. All this was made possible by the free market empowering consumers and producers to choose the best way to fuel Texas as America’s leading economic engine.

However, renewable energy generation has made a comeback of late. Not because it has suddenly become efficient or affordable, but because generators have successfully lobbied federal, state, and local governments to get profits from taxpayers they can’t get from the free market.

The saying goes that as goes Texas, so goes the nation. The latest Texas Public Policy Foundation paper reports on the true cost of subsidizing renewable energy in the Lone Star State.

Key Points:

  • We estimate the total cost to taxpayers and consumers of subsidies going to renewable energy operators in Texas from 2006 to 2029 to be $36 billion. 
  • The biggest single subsidy in Texas is the federal Production Tax Credit (PTC) at just over $16 billion dollars through 2029. 
  • Generators doing business in Texas that have received PTC subsidies include NextEra Energy (leading the way with eligibility for $5.7 billion of tax credits nationally since 2008), EDP Renewables ($1.6 billion), Invenergy ($1.3 billion), NRG Energy ($1.1 billion), E.ON ($1.1 billion), Duke Energy ($938 million), BP ($913 million), EDF Renewables ($622 million), Exelon ($528 million), and Pattern ($500 million). 
  • Texas state and local subsidies expected to be paid out through 2029 combine to reach almost $18 billion, including the Competitive Renewable Energy Zone transmission lines ($14 billion), 313 property tax abatements ($2.5 billion), grid interconnection costs ($1 billion), and the REC program ($570 million). 

Bill Peacock is Vice President of Research for the Texas Public Policy Foundation.