Everything’s Bigger in Texas, Even Energy
In the dark of night, the clang of pans and plates going into the dishwasher is accompanied by the vibrating growl of a vacuum cleaner in the Lone Star State. To clarify, residents in Texas are waiting until the clock strikes 9pm to run their electrical appliances and unplugging before the sun rises at 6am. These odd hours of operation have surfaced due to wind farms in Texas generating so much energy that several utilities are giving power away for free during this time frame.
Texas, often most renowned for its lucrative oil and gas industry, is actually the largest wind power producer in the country. In fact, Texas’ wind power accounts for roughly 10 percent of the state’s generation and Texas runs its own electricity grid that does not connect to those that serve other states. Whilst offering free energy might seem like a rife for wasting energy from the hours of 9pm till 6am, the concept actually saves the utility company money in the long term. To enumerate, shifting usage away from peak hours equates to lower wholesale prices, reduces the need of having to construct additional power plants, and condenses the burden that an oversupply of wind energy places on the power grid.
As has been noted above, Texas runs its own electricity grid and the abundance of nightly wind power generated here must be consumed here. Wind blows most strongly at night and is inexpensive because of its profusion in Texas and relatively low maintenance cost. Once wind turbines are moving and have been built, upkeep does not cost much money and there is no need for fuel. Furthermore, wind operators have another advantage over other generators due to generous tax breaks, in specific, a federal production tax credit of 2.3 cents per kilowatt-hour that applies to every kilowatt of power produced.
Undeniably, Texas is one of the largest deregulated electricity economies in the country, making it better suited for innovation and easier for companies to create new incentives for customers. As Scott Burns, senior director for innovation at Reliant Energy stated “You can be green and make green.” Indeed, Texas is a unique power market that has the ability to take great strides in innovation for customers. If your company is operating in the Energy field and you have conducted research and development (R&D) activities to create innovative solutions or incentives, you may be eligible for the government’s R&D Tax Credit scheme. This does not necessarily involve experimenting in a white coat or conducting rocket science, rather, activities you may already be conducting may be eligible. Contact our qualified R&D Tax Specialists today to find out if you are suitable to apply for the tax savings. We will happily conduct a feasibility study, at no cost, to find out if you could benefit from the credit. Make the most of this opportunity to invest in your research and development and watch your business continue to grow and evolve in an increasingly competitive market.