Texas, long regarded as a frontrunner in U.S. clean energy development, is now experiencing a noticeable slowdown. A recent wave of project cancellations — particularly in solar and battery storage — has raised questions about the near-term momentum of the state’s energy transition.
Over the past two months, more than 9 gigawatts (GW) of new energy projects have been withdrawn from the planning queue, according to an analysis using data from ERCOT, the state’s grid operator. Battery storage appears to be the most affected, with approximately 4 GW of capacity shelved. Solar projects saw 3.5 GW of cancellations, and nearly 2 GW of natural gas generation was also affected.
Policy and Trade Headwinds Add Pressure
Several factors are influencing the current pause. Rising uncertainty surrounding international trade policy, particularly regarding the imports of solar and battery components, is complicating procurement for many projects. Additionally, recent shifts in federal legislation have introduced new dynamics around long-term support for renewable energy, particularly tax credit frameworks introduced in recent years.
Analysts note that smaller developers — often more sensitive to regulatory and market shifts — have begun pulling back. Broader investment signals also appear to be in flux, contributing to hesitation across the development landscape.
At the state level, efforts are underway to support the expansion of natural gas capacity. A recent funding initiative aims to back up to 10 GW of gas-fired generation through low-interest loans, signaling continued emphasis on dispatchable power.
Meanwhile, various advocacy groups have raised concerns about the economic impact of renewables on grid reliability and market stability. However, clean energy proponents argue that such claims overlook the broader benefits and evolving cost-efficiency of solar and battery technologies.
Reliability Up — Even As Projects Slow
Despite the slowdown in new clean energy projects, ERCOT’s overall grid reliability has improved. The system added more than 9,600 megawatts (MW) of capacity over the past year, with solar and battery storage comprising the majority. In contrast, over 360 MW of natural gas capacity was retired.
This additional capacity has helped drive down the risk of grid emergencies. After consecutive summers of conservation alerts in 2022 and 2023, no such alerts were needed in 2024. For 2025, peak-hour emergency risk has dropped to less than 1%.
Recent performance during extreme heat further highlighted the role of storage: battery systems delivered over 6 GW of power to the grid during peak demand, setting a new benchmark for the state.
Developers Still See Opportunity
Despite the uncertainty, some players remain optimistic. A recent financing deal secured over $230 million for multiple new battery storage projects in Texas, signaling continued appetite for innovation and growth in the sector.
ERCOT remains one of the most active and watched electricity markets in North America. While some developers historically kept stalled projects in the queue, the recent cancellations — totaling over 8 GW across April and May — suggest a notable shift in sentiment.
Texas, home to the largest renewable portfolio in the U.S., may be a bellwether for broader national trends in clean energy. Some observers view this as the beginning of a transitional period, while others point to continued growth in electricity demand — forecasted to rise 70% by 2031 — as a fundamental driver for future development.
Whether that demand will be met through renewables, natural gas, or a hybrid mix remains to be seen
