One day after the Presidential election, the U.S. formally withdrew from the Paris climate agreement. Although this coincides with President Trump’s ongoing initiatives to protect the coal industry, this has not slowed down companies looking to profit from the expanding renewables industry.

Transitioning to clean energy

Even in Texas, a state that is synonymous with oil, 95% of the proposed new capacity will be from solar, wind, and battery storage projects. Gas projects come in 4th place, and nothing was proposed for coal at all.

Granted, only about 70% of these projects are actually built. It still speaks volumes, however, that renewable energy dominates the proposals. Investors and developers all seem to agree about the direction the Texas market seems to be heading.

Projected growth

Texas’ solar capacity is expected to double this year, putting it over 5,000 MW. Next year it will more than double again, rising to 13,000 MW. Granted, gas has accounted for nearly half of Texas’ load requirements in 2020–and coal and nuclear also represent their fair share–but it would seem that the future of energy in Texas is going green.

Wood McKenzie and the Solar Energy Association rank Texas fourth in the nation for solar installed. Texas is projected to add 4GW of capacity over the next five years, a growth that would make the state a national leader.

Wind, too, is contributing more, with a projected addition of 5,800 MW in new generation. This would be a record one-year increase. Likewise, battery storage is expected to triple in its capacity this year.

Beyond politics

As an example of this, Energy Transfer LP, a giant pipeline operator, recently reached an agreement with Canadian Solar to utilize power from their Maplewood 2 Solar Project. According to a press release, this project is the third of Canadian Solar’s constructions in Texas. The Maplewood Solar Project, which has already agreed to supply an estimated 50% of Anheuser-Busch’s energy consumption, has a capacity of 327 MWp. The Maplewood 2 project will add an additonal 40 MWp of capacity from its site in the Permian Basin of West Texas.

Energy Transfer’s move to solar shows that the shift in the energy industry is more about economics than politics. The company is perhaps best known for its Dakota Access oil project, and CEO Kelcy Warren is a major Trump donor. Yet this does not mean that renewable energy can’t still be seen as a lucrative market and a worthy investment.

Mackie McCrea, President and Chief Commercial Officer of Energy Transfer noted the project “demonstrates our commitment to reducing our environmental footprint by integrating alternative energy sources when economically beneficial. While we currently use a diversified mix of energy sources along with emission-reducing technologies to operate our assets, this project marks a new milestone for us as our first dedicated solar-powered facility.”

The desire for clean energy

Many consumers and corporations simply want to do their part to lessen the impact of climate change. For them, a transition to renewable energy is a means by which to show their social responsibility. Google, AT&T, Microsoft, Walmart, T-Mobile, and Amazon have been listed as some of the largest buyers of sustainable energy.

Price, however, is becoming a major factor in why renewables are more and more attractive for investors, developers, and consumers alike. According to a study by Lazard, a major asset management firm, the costs of both solar and wind energy are dropping.  Over a five-year period, solar declined by 11% per year, and wind declined by 5% per year. In fact, after accounting for government subsidies, “the cost of onshore wind and utility-scale solar is competitive with the marginal cost of coal, nuclear and combined cycle gas generation.”

Whether companies are motivated by social responsibility, sheer economics, or both, Texas is reaping the benefits of the solar industry. Texas easily leads all states in wind powern and in the first half of 2020, Texas added more solar than any state.

Economic growth from renewables

Renewable energy also has become a tool in economic development. When Nasdaq was talking with Texas about a possible move to Dallas, the state’s renewable energy was a major selling point.

Researchers say local communities receive roughly $5 billion from existing wind and utility-scale solar projects. An additional $4.8 billion to $7.3 billion will go to Texas landowners as royalties over the lifetime of those projects. Although Texas no longer has mandates for renewable energy (the state passed those goals long ago), Texas has an abundance of sun, wind and land, and a competitive market that welcomes all players. These factors make up the fertile soil of Texas’ renewable energy market.

The state’s growth plays a part, too. In the past five years, U.S. electricity generation rose less than 1%. But Texas’ electric load jumped 10.4% over the period. These factors attract more manufacturing and business, which help lure more workers. The additional activity requires more energy, creating a virtual cycle of supply and demand.