The torch has been handed off. After leading the nation in the race for wind power for more than 20 years, California has relinquished the lead to Texas.

The Lone Star State officially became the national leader in wind power with 2,370 megawatts (MW) of generating capacity. The breakthrough was announced in the American Wind Energy Association’s (AWEA) Second Quarter Market Report, which was released this summer.

According to the report, the Texas total surpasses California by a mere 47 MW. The Golden State has been the national and international torchbearer for wind power since 1981, when the world’s first commercial wind farms were built there. At one point, more than 80 percent of the world’s wind power capacity was located in California.

Since then, nations including Germany, Denmark and Japan have embraced wind power, expanding the industry on the world stage. Meanwhile, other states have also narrowed the gap with California. Texas became the national leader after expansions to its Horse Hollow Wind Energy Center took the facility from 210 MW to more than 500 MW of generating capacity.

California and Texas join a list of nearly two dozen states with wind power projects in 2006, which the AWEA expects to be another banner year for the U.S. industry, with an unprecedented 3,000 MW projected to be installed by year’s end. The AWEA bolstered this positive outlook in mid-August, when it announced that U.S. wind energy installations had achieved another milestone by surpassing 10,000 MW in generating capacity.

The robust growth of wind power comes despite some new challenges facing the industry. Increasing demand for wind farms, rising costs in building materials and a weakening U.S. dollar are combining to raise the costs for new wind farm construction, and could pose a challenge for the industry as it strives to become a cost competitive player in the nation’s mainstream electricity market.