From pv magazine USA
Many large solar projects sell their electricity via PPAs, typically for time frames of about 25 years. According to LevelTen Energy's latest quarterly report, PPA prices are now rising in the United States.
LevelTen said developers face rising costs across the board, from financing and interconnection to labor and supplies. This has tempered the boost from federal tax credits made available by the US Inflation Reduction Act (IRA).
North American PPA prices continued to stabilize in the third quarter of 2023, up 4% over second-quarter prices. These current P25 PPA prices also reflect a 21% year-on-year increase over 2022 prices. The P25 price is derived from the 25th percentile of all PPA prices, with LevelTen reporting that this information is based on prices offered by developers for PPA contracts, rather than transacted PPA prices.
The report attributed the 4% quarterly jump in solar PPA prices to price increases for independent system operators like PJM Interconnection, Southwest Power Pool (SPP), and ISO-New England. While price increases in the recent quarter were lower than in some previous quarters, cumulative price increases are making it more difficult for corporate buyers to secure CFO approval, it said.
“Developers are looking to find ways to provide buyers with some pricing relief, but this is exceedingly difficult amid a wide array of development and financing challenges,” said Gia Clark, senior director of strategic accounts, LevenTen Energy. “Expectations of a prolonged high interest rate environment are pushing developers’ costs up across the board, with energy players of all sizes feeling the heat.”
Prices in the Texas ERCOT region fell this quarter, down 4%. In the second quarter, threats from anti-renewables bills led developers to include risk premiums in their prices. Those regulatory threats have since diminished, and average prices have come back down in response.
Image: LevelTen Energy
To continue reading, please visit our pv magazine USA website.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.