ERCOT Texas Solar Exceeding Coal Generation Report: EIA Grid Forecast

Key Takeaways

• Annual utility-scale solar electricity generation is forecast to surpass coal generation for the first time in 2026 in the ERCOT grid.
• Solar output is projected to reach 78 billion kilowatthours (BkWh) in 2026, compared with 60 BkWh generated by coal.
• Solar's share of ERCOT's generation mix tripled from 4% to 12% between 2021 and 2025, while coal dropped from 19% to 13%.
• Texas accounts for approximately 40% of all utility-scale solar capacity additions in the United States in 2026, totaling 14 BkWh.
• The 837 MW Tehuacana Creek 1 Solar and BESS project in Texas represents the largest solar installation coming online nationwide in 2026.

The Historic Texas Power Grid Transition

The Electric Reliability Council of Texas (ERCOT) grid, which covers most of the state's electric load, is undergoing an unprecedented structural transition. In its Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration forecasts that annual electric power generation from utility-scale solar will surpass that from coal for the first time in 2026 within the electricity grid that covers most of Texas.

According to the EIA's projections, annual solar electricity generation in ERCOT will reach 78 billion kilowatthours (BkWh) in 2026, compared with 60 BkWh generated by coal-fired power plants. This milestone marks the first time that solar energy has overtaken coal on an annual basis in any major fossil-fuel-producing state.

While Texas ERCOT solar buyback plans govern residential distributed compensation, the wholesale transmission grid is dominated by multi-hundred-megawatt solar plants. Combined with rapid deployment of battery storage arbitrage systems, low-cost photovoltaic power is permanently reshaping Texas power economics.

Long-Term Fuel Mix Evolution in ERCOT

The crossover between solar and coal reflects a multi-year repositioning of ERCOT's generation stack. Although natural gas remains the dominant source of electricity generation in ERCOT, accounting for an average 44% of electricity generation from 2021 to 2025, solar’s share of the generation mix has increased from 4% to 12% in those years, while coal’s share has decreased from 19% to 13%.

This transformation is permanent. According to developer reporting in the EIA's Preliminary Monthly Electric Generator Inventory based on Form EIA-860M, there are currently no plans to build new coal plants in ERCOT. As older, higher-heat-rate coal facilities retire or operate as seasonal peakers, zero-fuel-cost solar farms capture daytime wholesale clearing prices.

Texas as the Capital of U.S. Utility Solar Additions

Texas has emerged as the nationwide leader in solar construction speed and volume. The EIA expects approximately 40% of total solar capacity additions in the United States in 2026, or 14 BkWh , to occur in Texas.

Leading this deployment wave is the Tehuacana Creek 1 Solar and BESS facility. At 837 megawatts (MW), this project combines utility-scale photovoltaics with a battery energy storage system and represents the largest solar photovoltaic project that will come online in 2026 anywhere in the United States.

The project's scale demonstrates how independent power producers take advantage of streamlined interconnection rules outlined under Texas PUC Rule 25.211 and open wholesale access to bring large-scale clean power online rapidly.

Monthly Crossover Milestones and 2027 Projections

Although 2026 marks the first full year of solar generation dominance over coal, the seasonal crossover emerged earlier. Solar exceeded coal in ERCOT on a monthly basis for the first time in March 2025, when solar generation totaled 4.33 BkWh exceeding coal’s 4.16 BkWh. Solar generation continued to exceed coal through August of that year.

In 2026, solar output exceeded coal starting in March and is forecast to maintain that monthly lead through November. Looking further ahead, the EIA's models project an even wider margin: in 2027, annual solar generation is forecast at 99 BkWh in ERCOT compared with 66 BkWh of annual coal generation, supported by 11.8 BkWh of additional solar capacity coming online that year.

Industrial and High-Density Electricity Demand Drivers

Solar capacity additions are expanding rapidly to satisfy surging power demand across the ERCOT system. Electricity demand continues to rise in ERCOT due to increased large loads from cryptocurrency mining, data center buildout, rising industrial activity, and refining, production, and processing activities associated with oil and gas.

By adding 14 BkWh of solar generation in 2026 and another 11.8 BkWh in 2027, the Texas grid utilizes low-cost daytime solar to absorb these heavy industrial loads. For energy planners assessing solar power in Texas, the transition from coal to solar highlights Texas as the prime example of market-driven clean energy deployment at gigawatt scale.