Texas Energy Market Dominance Will Only Continue to Strengthen

Texas is the largest energy-producing state in the US, now generating around 18% of the country’s solar power. That didn’t happen by accident.

A regulatory environment that rewards speed, a market with extraordinary demand, and a development ecosystem capable of quickly deploying large-scale projects has propelled Texas’ renewable energy growth. Counsel who can navigate both the legal and commercial dimensions will be positioned to help the infrastructure of the future.

As the general counsel of a company building some of the largest solar and battery energy storage projects in Texas, I see firsthand how legal strategy shapes the energy transition. In a sector marked by policy uncertainty, supply-chain volatility, and massive capital requirements, the legal function must extend far beyond compliance. It is an operational driver that influences execution, financing, customer experience, and long-term competitiveness.

I entered the renewable energy world with years of experience in banking and private practice. That background informed me about project finance structures, modeling, and private equity, which shapes how I lead Vesper Energy’s legal team. We operate as commercial partners, not just risk managers.

Every major business decision in renewable energy sits at the intersection of law and finance, encompassing regulatory, procurement, interconnection, and commercial offtake, as well as tax equity and mergers and acquisitions. When markets move quickly, and policies shift with each legislative session, counsel must help the business anticipate risk and capitalize on new opportunities.

Vesper Energy’s legal strategy is embedded in operations, allowing us to advance projects with clarity, protect value, and accelerate deployment.

Texas’ structural advantages have become powerful differentiators. The state’s development timeline differs significantly from states with multi-layer permitting (federal, state, and local jurisdictions) and years-long and opaque interconnection study processes.

Developers in Texas can secure land, get connected to the power grid, and begin construction within a few years. In states such as California, that same cycle can stretch close to a decade.

The difference often comes down to permitting complexity. Texas’ county-centric processes, especially in rural regions including West Texas, minimize procedural bottlenecks and reduce opportunities for challenges.

Texas also benefits from the Electric Reliability Council of Texas’ independence. Because ERCOT operates outside the two major US interconnections, the market design is simpler, the regulatory landscape is more contained, and project timelines are more predictable.

Recent ERCOT market design changes have the potential to change the energy market landscape. It’s the early days with Real-Time Co-Optimization Plus Batteries, which became effective Dec. 5. RTC+B allows the ERCOT to simultaneously dispatch generators for both energy (electricity) and ancillary services (grid support) every five minutes in the real-time market, rather than performing these market functions separately.

It offers the potential for market efficiency and increased reliability. ERCOT and market participants can optimize renewable and battery resources, resulting in more predictable revenues, higher asset valuations, and a more reliable, efficient energy grid.

Transmission upgrades are also underway, providing generators with more efficient paths to deliver power to high-demand areas. The rapid expansion of artificial intelligence and data centers is driving this demand. Because these facilities have fewer latency constraints, they can be located in rural regions such as West Texas, where much of the state’s new solar development is planned. As a result, extra-high-voltage lines are essential to move large volumes of power over long distances.

We see the benefits of the Texas model in real time. Our Hornet Solar project reached its first major milestone in summer 2024 when it synchronized to the grid. Commercial operation for the 600-megawatt facility was achieved in April 2025.

Texas’ market strengths don’t entirely remove risk. Several new rules from HB 1500 (2023), for instance, could reshape the energy market landscape by implementing firming requirements, developing new reliability products, and increasing interconnection fees.

Ongoing regulatory changes could impose stricter operating requirements, which could lead to additional operating costs for renewable assets. Changes to interconnection deposits, load-shedding rules, or nonrefundable fees might also impact affect project economics.

Federal laws, anti-dumping and countervailing duties petitions, and tariffs have led to supply-chain uncertainty. The AD/CVD cases and tariffs increase costs for US renewable developers and delay equipment imports, which makes contracts more complex and requires careful timing.

In this environment, the legal, regulatory affairs, and procurement functions must be proactive. We have structured contracts to withstand tariff fluctuations and supply chain disruptions. While we prioritize sourcing US equipment, we often look internationally, which means sharing tariff risk with suppliers and ensuring flexibility in procurement terms. We now align major agreements more closely with financing to reduce exposure to rapidly changing markets.

Cross-functional collaboration is central to our business model. Our legal team is involved from the moment a project enters development through construction, working alongside our finance, real estate, engineering, procurement and construction, government affairs, communications teams.

A disciplined stage-gate process, weekly cross-team reviews, and a multilayer contract-review structure help ensure our deals are compliant and commercially sound. We maintain a lean internal legal team supported by targeted outside counsel. And our government affairs lead, a registered federal lobbyist, helps us anticipate regulatory changes before they reach our doors.

Power is emerging as the next major global commodity. Data centers and electrification across industries are creating concentrated demand and reshaping where and how we build.

For legal leaders, this moment requires a broader mandate. Make regulatory strategy central, not peripheral. Collaborate early and often with teams across your organization. Use technology and outside expertise to scale intelligently. And view the legal function as a driver of growth and customer experience, not simply a brake on risk.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

M. Chad Richwine is senior vice president and general counsel at Vesper Energy, where he oversees the legal, regulatory and government affairs, and compliance departments.

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