US solar PPA pricing is finally cooling off



LevelTen Energy has reported that power purchase agreement (PPA) prices fell 1% from the first quarter to the second quarter in the US, after three consecutive years of quarterly increases.

Solar PPA pricing in the US may be stabilizing, LevelTen Energy reports. After three consecutive years of price increases every quarter, PPA contract prices fell 1% from Q1 to Q2 2023. The prices of Aurinkoenergia’s electricity purchase contracts rose by 25% year-on-year in the second quarter.

“Although 1% is a small change, this is the first time since the first quarter of 2020 that the market’s average continental solar PPA price has decreased,” said Gia Clark, director of strategic accounts at LevelTen Energy. “It’s a promising sign that conditions are starting to stabilize.”

Inflation, supply chain complexity, rising interest rates and regulatory uncertainty have challenged developers in recent years. Despite these issues, the industry is a year removed from the US Inflation Restraint Act, and developers have begun to incorporate the benefits of the legislation into their strategies.

Increased mobility in the solar energy supply chain is also likely to influence solar PPA price developments in the second quarter, LevelTen said. More than 12 GW of solar modules crossed the border into the US in the first quarter of 2023 alone, compared to just 29 GW imported in all of 2022, Wood Mackenzie reported.

Meanwhile, wind PPA prices continue to rise due to low supply, rising 13% in the second quarter.

“As a result of permitting and interconnection issues, fewer wind projects are coming to market than solar,” Clark said.

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David is a passionate writer and researcher who specializes in solar energy. He has a strong background in engineering and environmental science, which gives him a deep understanding of the science behind solar power and its benefits. David writes about the latest developments in solar technology and provides practical advice for homeowners and businesses who are interested in switching to solar.

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