Rural Texas Receives USDA Funding for 400 MW Solar, 200 MW Battery Storage Project

At the end of December 2024, the U.S. Department of Agriculture (USDA) Rural Utilities Service awarded $1.4 billion in grant and loan financing to San Miguel Electric Cooperative, a utility provider that operates in rural Texas. The financing will go toward a total of 600 MW of renewable energy, including 400 MW for solar panels and 200 MW for a battery storage system.

According to the USDA, the projects will help power rural households across 47 counties in southern Texas and will offer lower cost, renewable power.

“We are very excited to be named a selectee for the New ERA program, providing our community with unprecedented opportunities,” Craig Courter, general manager of San Miguel Electric Cooperative, said in a statement. “This includes a wide range of educational, agricultural, and infrastructure improvements that will benefit our employees, cooperative members, and the region as we continue to deliver affordable, reliable energy to rural Texans at a time of record demand.”

The funding was made possible through the Empowering Rural America (New ERA), a $9.7 billion program under the Inflation Reduction Act. The program is designed to help rural communities transition to cleaner energy sources while reducing environmental pollution.

The USDA reported that the awarded projects for San Miguel Electric Cooperative will create about 600 jobs, and the renewable energy will save customers more than $1.09 billion over the course of 30 years.

In total, the project is expected to reduce emissions by 1.8 million tons per year, or the equivalent of removing about 446,000 cars from the roads annually.

“The USDA funding represents a new era for the San Miguel Electric Cooperative, which has long been the backbone of electric generation for generations of South Texans,” Courter said in a statement. “New ERA program funding will allow us to virtually eliminate our greenhouse gas emissions, while continuing to provide affordable and reliable power to rural South Texans.”

As CleanTechnica reported, San Miguel Electric Cooperative currently sources much of the electricity it provides to its rural customers from a lignite-burning thermal generating station. According to Greenpeace, combustion of lignite, a type of coal, can contribute more carbon emissions than burning hard coal and up to seven times more emissions than using gas for fuel.

Additionally, lignite is a notorious pollutant that can emit particulate matter, sulfur oxides, nitrogen oxides, carbon monoxide, mercury and other harmful emissions when burned, the U.S. Environmental Protection Agency reported.

Currently, San Miguel Electric Cooperative has a Wholesale Power Contract with South Texas Electric Cooperative (STEC) for electricity sourcing, but it intends to establish a new Wholesale Power Contract as the cooperative switches from lignite to renewable energy.

The new solar and battery storage facility is slated to begin operations by 2027, CleanTechnica reported. San Miguel Electric Cooperative joins nine other cooperatives receiving a total of $4.37 billion in funding announced in December. An additional six cooperatives have been selected to move forward with the process to receiving funding for clean energy through the New ERA program. In total, the New ERA program has awarded 15 cooperatives so far.

“USDA is committed to enhancing the quality of life and improving air and water in our rural communities,” Agriculture Secretary Tom Vilsack said in a statement. “The Inflation Reduction Act’s historic investments enable USDA to partner with rural electric cooperatives to strengthen America’s energy security and lower electricity bills for hardworking families, farmers and small business owners.”