Could New Texas Bills Undermine Utility-Scale Solar + Battery Growth?

You’ve probably heard the phrase “don’t mess with Texas”—but lately, renewable energy advocates (like me!) are wondering if that’s exactly what’s happening at the legislative level. Two new proposals in the Texas Legislature—House Bill 3356 and Senate Bill 715—are sending some waves of uncertainty through the solar and storage industry. And that’s putting it mildly.  So, could new Texas bills undermine utility-Scale solar?

These bills would require all existing and future wind and solar farms in Texas to provide “backup” power. This would come from either natural gas-powered electric generators or very large battery energy storage (BESS) arrays. This or else face heavy penalties, including shutdowns. One catch? This requirement would be retroactive, meaning it doesn’t just affect future projects. It would hit systems that are already installed and operating today. So, could new Texas bills undermine the utility grid and clean energy advances? (hint: yes. definitely.)

What’s at Stake?

It’s not totally bad policy. Some of these measures could help grid reliability. HB 3356 and SB 715 may be framed as reliability measures, but their real-world impact could be both economically and operationally disruptive. Here’s a deeper look at what’s on the line for Texas:

  •  Higher Electricity Prices for Consumers
    Requiring solar and wind projects to add backup capacity adds significant capital and operating costs. These costs will likely be passed down the line:

    • Power producers may raise wholesale rates to recoup new infrastructure investments.
    • Retail electricity providers could respond by increasing prices for residential, commercial, and industrial customers.
    • The most impacted consumers will be in competitive markets without long-term fixed-rate plans.
  •  Greater Grid Reliability Concerns in the Short Term
    Ironically, forcing wind and solar operators to retrofit with dispatchable resources—or risk penalties—could backfire:

    • Some operators may shut down altogether rather than make costly upgrades, reducing available generation during high-demand periods.
    • Texas could see a shortfall of available capacity during heat waves or winter freezes, especially if gas plants or firming resources can’t be built in time.
    • This could actually increase blackout risks during grid emergencies—the very thing these bills claim to prevent.
  •  Loss of Investor Confidence in Texas Clean Energy
    Our state has historically been a magnet for renewable investment. This due to our deregulated market, low land costs, and abundant sun and wind. These bills introduce retroactive rules that change the game midstream and will likely create confusion and delay in the industry:

    • Retroactive regulation undermines contractual stability and project bankability—key drivers of large-scale energy finance.
    • Uncertainty around future compliance costs could stall both in-state and out-of-state capital from funding new Texas-based projects.
    • Investors may redirect funds to states with more consistent, market-aligned energy policies.
  •  Loss of Intertia in Lowering Carbon Outputs and Pollution
    The option here for these operators to build large natural gas-fired backup generators in leu of more costly battery storage arrays has trade-offs. They may allow for decision-making shortcuts that could dramatically reduce the velocity towards which Texas has been (mostly) embracing the clean energy economy. While cleaner than diesel-powered electrical generators, burning natural gas is much dirtier than battery installations over time.

The Industry Responds

The renewable energy community’s backlash has been swift and loud. Organizations like Public Citizen have flagged potential constitutional issues with the bills. Especially concerning to them are retroactive regulation and the impairment of existing contracts. That could open the door to legal challenges.

Even beyond the solar and wind sectors, businesses are raising red flags. The Texas Association of Manufacturers warned that increased electricity costs will be passed on to commercial and industrial customers, which could impact prices and operations across the board.

The Bigger Picture

This legislative push comes at a time when Texas needs more energy resilience—not less. Events like Winter Storm Uri and record-breaking summer demand have already shown that the grid is under pressure. Battery energy storage and distributed solar play a critical role in adding flexibility, reliability, and backup power to the state’s electric system.

While mandating more instant backup power for our grid sounds like a logical plan, it’s the details that matter. Jammig through one-size-fits-all legislation is never the best policy – just the most expeditious. Plus, there’s a ton of evidence that our state’s electrical distribution lines are about to run out of capacity (projected to happen in 2026). We (as a state) desperately need to invest money on that too. And building new grid capacity ain’t cheap either.

Our Take

Suppose Texas truly wants a stable, self-reliant, and diversified grid. In that case, we shouldn’t mandate statewide retroactive policy without a better look at the tradeoffs for a more balanced, all-of-the-above approach. Penalizing the ratepayers and forcing technology implementation in a ham-fisted way is not the path to our brightest solution. The importance of this topic demands more discussion, more stakeholder discussions, and more flexibility in proposed solutions.

We’ll be watching how these bills progress—and as always, we’re here to help you understand how policy changes could affect your energy choices.

Want to future-proof your residence or business and further embrace the new energy economy? Get in touch and let’s talk about building smarter energy solutions—regardless of what the legislature is up to.

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