Texas solar output is expected to exceed coal-fired electricity generation next year after new federal energy projections showed renewable capacity continuing to expand across the state’s power market. The U.S. Energy Information Administration released updated forecasts indicating that solar facilities connected to the Texas grid are projected to produce more electricity than coal plants in 2026, reflecting ongoing changes in how power is generated within the state.
The development comes as Texas continues adding large-scale renewable energy projects while electricity demand rises because of population growth, industrial activity, and expanding data center operations. The Electric Reliability Council of Texas, which manages most of the state’s electric grid, has seen rapid increases in utility-scale solar installations over the past several years, particularly in West Texas and South Texas regions where land availability and sunlight conditions support large energy projects.
Federal projections showed coal’s share of electricity generation continuing to decline as older plants operate less frequently and renewable facilities contribute larger volumes of power during peak daylight periods. Natural gas is still expected to remain the largest source of electricity generation in Texas despite the projected change involving coal and solar output.
Texas renewable projects continue expanding across the grid
Texas has become one of the largest utility-scale solar markets in the United States as developers increase investment in renewable infrastructure throughout the state. Large solar facilities have been added near transmission corridors that connect power-producing regions with major metropolitan areas including Dallas-Fort Worth, Houston, Austin, and San Antonio.
ERCOT data over recent years has shown steady growth in installed solar capacity, with additional projects already under construction or scheduled to begin operations before the end of 2026. Energy companies and infrastructure developers have continued securing land agreements and financing for new projects even as construction costs and supply chain conditions fluctuate.
Battery storage development has also expanded alongside solar generation. Several operators in Texas have paired renewable facilities with large battery systems capable of storing electricity generated during daylight hours and supplying power later in the day when demand remains elevated. Grid operators have increasingly relied on battery resources during periods of heavy electricity consumption, especially during summer months.
The increase in renewable generation has coincided with broader changes in the Texas electricity market. Population growth has raised residential electricity demand, while industrial facilities, manufacturing operations, and technology infrastructure projects have added additional pressure to the state’s power system.
Artificial intelligence infrastructure and data centers have become a growing factor in long-term electricity planning discussions across Texas. Technology companies continue evaluating locations throughout the state for large computing facilities that require significant energy resources and stable transmission access.
Coal-fired generation faces continued decline
Coal plants once represented a dominant source of electricity production within Texas, but their share of the market has declined over the past decade as natural gas and renewable sources expanded. Several coal facilities have either reduced operations or announced retirement plans because of changing market conditions and operational costs.
Lower natural gas prices in previous years contributed to the shift away from coal generation, while falling solar development costs increased the competitiveness of renewable projects. Utility-scale solar installations now operate at significantly lower costs than earlier renewable developments, allowing operators to compete more effectively within wholesale electricity markets.
Texas still operates multiple coal-fired power plants, particularly facilities supplying electricity during periods of high demand or lower renewable generation. However, federal forecasts indicate coal generation volumes are expected to continue decreasing relative to renewable energy output.
The changing generation mix reflects broader national energy trends as utilities and power producers adjust long-term infrastructure planning. Energy companies have increasingly diversified generation portfolios to include combinations of natural gas, solar, wind, and battery storage resources.
Wind generation remains another major part of the Texas electricity system. The state already leads the nation in wind power production, with large wind farms concentrated across West Texas and the Panhandle region. Combined wind and solar output now represents a substantial portion of the ERCOT generation mix during certain operating periods.
Renewable generation patterns differ seasonally and hourly, requiring grid operators to balance supply sources throughout the day. Solar production typically peaks during midday hours, while wind generation in Texas often increases during overnight periods.
Electricity demand growth reshapes infrastructure planning
Texas continues experiencing economic and population growth, leading state officials and grid planners to project significantly higher electricity demand over the next decade. Industrial expansion tied to semiconductor manufacturing, petrochemical processing, hydrogen projects, and artificial intelligence infrastructure has increased the need for additional power generation and transmission capacity.
ERCOT has continued reviewing long-term grid reliability as rising demand and extreme weather place additional pressure on the state’s electricity system. Summer heat waves remain a major challenge because air-conditioning use can push electricity consumption to record levels across Texas.
State policymakers and energy companies are also focusing on transmission expansion and reliability planning as renewable projects continue growing in West Texas. While some lawmakers support stronger natural gas generation for grid stability, renewable developers say solar, wind, and battery projects are helping meet rising electricity demand.
