Texas, long a leader in renewable energy growth, faces a turbulent energy future under the Trump administration and new state legislation. The passage of President Trump’s “One Big Beautiful Bill” in July 2025 has dramatically altered the national energy landscape by repealing key tax incentives for wind and solar projects after 2027, while preserving longer-lasting subsidies for fossil fuels, nuclear power, and select dispatchable sources.
For Texas, the stakes are enormous. The state leads the nation in wind power and is rapidly expanding solar and battery storage. Yet, analysts warn that without federal tax credits, more than 77 gigawatts of planned clean energy projects—enough to power roughly 19 million homes—may be abandoned over the next decade. The resulting shift could raise average household electricity bills in Texas by over $220 per year by 2030 and by nearly $500 by 2035. An estimated 94,000 clean energy jobs are at risk, and Texas’s economy could suffer a staggering $87 billion loss in GDP by 2034.
Despite federal rollbacks, Texas electricity prices remain about 24% below the national average, thanks largely to the success of renewables and battery storage in stabilizing the ERCOT grid. Blackout risk during summer peaks has plummeted—from a 12% chance in 2024 to just 0.3% in 2025—due to the growing role of batteries and solar smoothing out demand.
At the state level, Texas lawmakers proposed a flurry of anti-renewable bills in 2025, including mandates that would have imposed heavy costs on solar and wind developers. These measures passed the state Senate but failed in the House, amid backlash from businesses and grid experts warning that punishing renewables would increase consumer costs and reduce reliability.
Instead, the legislature passed more moderate reforms. These included stronger oversight of ERCOT, new rules for transmission inspections, and support for new dispatchable generation, particularly nuclear. While these changes aim to ensure long-term grid reliability, the future of renewables in Texas remains uncertain.
The combined effect of federal and state actions threatens to undermine the very mix of resources that made Texas’s grid cleaner, cheaper, and more resilient. Without renewed support for clean energy, the state may revert to costlier, less reliable fossil-fuel-heavy generation—undoing a decade of progress just as electricity demand surges from population growth and industrial expansion.
Meanwhile, Texas is facing a rapid surge in electricity demand driven by the explosive growth of artificial intelligence and data centers. The state’s grid operator, ERCOT, forecasts peak demand could nearly double by 2030—from 85 gigawatts to as much as 150–218 GW—largely due to power-hungry AI infrastructure. Hundreds of new data centers are being developed across the state, many with their own on-site natural gas generators to ensure reliable power.
In response, more than 100 new gas-fired power plants are in the permit pipeline, shifting the state's energy mix further toward fossil fuels. While this buildout bolsters short-term grid reliability, it also raises electricity costs and carbon emissions. Analysts warn Texas’s reliance on gas, especially amid the rollback of federal renewable energy incentives, could push consumer bills higher and increase long-term environmental impacts.
To manage the load, Texas is investing in billions of dollars of transmission upgrades and passing legislation to regulate large users like AI centers. Yet, without stronger support for renewables and battery storage, the state risks trading clean energy progress for short-term stability—straining the grid and consumers’ wallets in the process. The AI revolution may redefine Texas’s power future—for better or worse.
Guest:
Doug Lewin is a nationally recognized energy expert based in Texas, specializing in electric grids, renewable energy, energy efficiency, policy, and utility regulation. He is best known as the author of the Texas Energy and Power Newsletter and host of the Energy Capital podcast, where he regularly analyzes how Texas’s energy landscape is evolving—particularly post‑Winter Storm Uri.
An Associate Professor of Practice at the LBJ School of Public Affairs (University of Texas at Austin), he teaches and studies topics like environmental and energy policy, climate transition, and the structure of electric grids.
His professional background includes founding Stoic Energy Consulting in 2018, leading policy advocacy at CLEAResult, and serving as the founding executive director of the South‑central Partnership for Energy Efficiency as a Resource (SPEER).
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This episode will be recorded on Monday, July 21, 2025.
