Short answer: it’s not just solar. A new analysis from Lawrence Berkeley National Laboratory (LBNL) and The Brattle Group, covered by PV Magazine USA, shows that retail electricity rates reflect a mix of fuel costs, extreme weather recovery, transmission investments, and policy design. Wholesale savings from utility-scale renewables are real—but they can be overshadowed by other drivers on the bill.

In Texas, where the electricity market is largely deregulated and demand continues to surge, these findings come with a local twist. ERCOT’s wholesale markets tell one story; retail bills tell another.

The common myth: more solar means cheaper power

It sounds intuitive. Sunlight is free, panels keep improving, and Texas is a national leader. Sometimes retail prices do fall when clean generation scales. Often they don’t, because retail rates include far more than energy generation. They also recover transmission and distribution costs, disaster recovery spending, and policy compliance surcharges. If those rise faster than wholesale savings, bills go up.

Eight forces that move retail electricity prices

Natural gas prices

Texas relies heavily on natural gas generation, which still sets marginal power prices in ERCOT. When gas prices spike, wholesale costs surge and retail rates follow. ERCOT’s real-time and day-ahead price dashboards show just how volatile the market can be. The EIA Texas profile confirms fuel costs remain the top driver of short-term rate changes.

Extreme weather and wildfire costs

Storm repairs, wildfire mitigation, and hardening programs raise utility costs that must later be recovered through rates. After Winter Storm Uri, grid-hardening and weatherization investments increased across ERCOT, pushing transmission and reliability surcharges higher. NRG’s 2025 ERCOT transmission cost report notes a 116% rise in transmission costs since 2013, with nearly $15 billion in new projects approved.

Utility-scale solar and wind (market-driven)

Large renewable projects continue to lower wholesale generation costs because they have no fuel expense. According to LBNL’s 2024 Utility-Scale Solar report, Texas remains one of the most competitive markets for low-cost solar power. Yet retail customers see mixed effects, since savings at the wholesale level can be diluted by rising delivery and policy costs.

Renewable Portfolio Standards (RPS)

Some states require utilities to meet renewable generation targets through RPS mandates, which can temporarily raise costs. Texas technically retired its RPS after exceeding its original 2025 goal early, showing how market-driven deployment (not mandates) now leads renewable growth. That’s helped keep prices more stable compared to states still using compliance credits. LBNL data still found small RPS-related price impacts nationally (~0.25–1 ¢/kWh).

Net-metered rooftop solar growth

Rooftop solar changes how utilities recover fixed costs. With fewer kWh sold, the remaining customers cover a larger share of transmission and maintenance costs. LBNL finds modest price effects (<0.5 ¢/kWh) in most states and larger increases (up to 2 ¢/kWh) in a few high-adoption areas like California. Texas avoided these spikes by modernizing its retail rate design early—most areas use value-based credits instead of full retail net-metering. ComparePower.com shows average Texas retail rates around 15.2 ¢/kWh as of August 2025, still below the U.S. average.

Load growth or decline

ERCOT demand is climbing fast—by about 7% in 2025 and 14% in 2026, according to the EIA Today in Energy forecast. New industrial loads like data centers, crypto facilities, and battery manufacturing are boosting both peak demand and total sales, helping to spread fixed costs across more kWh and potentially softening rate pressure.

Transmission and grid upgrades

Transmission expansion has become one of the biggest cost components of Texas power bills. NRG’s 2025 ERCOT transmission report documents that total transmission charges have more than doubled since 2013—driven by renewable integration, reliability upgrades, and weatherization mandates.

Policy and market design

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