LevelTen Energy’s latest report on PPA prices in North America shows an increase
The 10.4% YoY and 5.4% QoQ increase has to do with the policy and market environment
The result of the Presidential election in November this year is also likely to create uncertainty in the market
The solar prices determined in the power purchase agreements (PPA) have started to go up across North America as LevelTen Energy claims in its latest report. It reports a 5.4% quarterly increase in P25 PPA prices for this technology, while on a year-on-year (YoY) basis, the $56.58/MWh represented a 10.4% increase.
The online marketplace for renewable energy, LevelTen attributes this rise to a number of factors in its 2024 Q3 PPA Price Index North America report.
One of the biggest reasons is the import environment since the US government has increased tariffs on imported solar cells from China to 50%. As a result, developers have piled up low-cost panels from Southeast Asian nations such as Vietnam, Thailand and India.
This, along with the fact that domestically produced solar panels remain expensive, is putting upward pressure on solar tariffs under PPA arrangements. Additionally, the US Department of Commerce (DOC) recently announced countervailing duty (CVD) rates for companies shipping imported solar cells into the US. The department has yet to determine anti-dumping duties.
According to an analysis by Clean Energy Associates, this will most likely lead to changing contract terms for who ends up paying these duties going forward. The needle points to module buyers (see Tier I PV Makers Largely Unscathed By US DOC’s Preliminary CVD Rates).
Political uncertainty is also playing a role in slowing down the development of some industries, including clean hydrogen as LevelTen analysts point to the November Presidential Election outcome. While a complete overhaul of the Inflation Reduction Act (IRA) in case of a Trump win is unlikely, changes are possible.
However, the transferable tax credit market is booming and expected to close an estimated $20 billion to $30 billion in deals this year, something corporate buyers are aware of and are integrating more tools into their sustainability strategies.
Going forward, LevelTen sees a significant increase in power demand as generative artificial intelligence (AI) will fuel data center boom. “This rush for capacity will add further competition for available clean energy supply from established, sophisticated renewable buyers,” states LevelTen.
The complete report is available to LevelTen’s subscribers on its website.