...Solar, wind PPA prices are up 19 percent this year — LevelTen Energy explains why | Solar Builder

Solar, wind PPA prices are up 19 percent this year — LevelTen Energy explains why

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Market forces are driving up PPA prices, according to LevelTen Energy’s Q3 2021 PPA Price Index, which includes the latest wind and solar prices for North America. Wind and solar combined rose by 5.4% during Q3, and are up 19.1% YoY. Competition increased during Q3 due to an unprecedented mix of regulatory headwinds, supply chain challenges, and demand outstripping supply.

Solar prices continue to climb: Solar prices increased by an average of 14.7% YoY to $33.25 per MWh. In Q3, solar prices rose an average of 4.1% compared to Q2 2021.

One-third of solar developers said they are increasing PPA prices in response to the issue of managing forced labor issues related to the polysilicon supply chain.

“In our Q3 Survey of developers on the LevelTen Platform, one-quarter of solar developers said they planned to take action in light of these forced labor issues but had not yet done so, one-third of respondents said they were raising PPA prices in response to forced labor in the polysilicon supply chain, and more than half said they were incorporating anti-forced labor provisions into module supply contracts.”

Interconnection is a major threat to achieving the US’s solar energy goal as well. Congested interconnection queues and permitting delays are adding complexity to PPA negotiations and making it more challenging for developers to accurately assess project timelines and costs. The top three barriers to achieving the U.S. DOE’s goal of 40% solar by 2035 are: interconnection timelines and costs (89%), permitting challenges (52%), and solar supply chain challenges and constraints (50%).

“Though this is a highly competitive market, we know that many buyers still need to procure to hit renewable energy deadlines that are right around the corner,” said Rob Collier, VP of Developer Solutions at LevelTen Energy. “Buyers that are motivated, decisive, and flexible in their procurements will succeed.”

Yet, LevelTen notes that, given all of the adversity, “it’s perhaps surprising prices didn’t soar even higher in Q3 — though it is likely that the full impact of these issues will manifest more extensively during Q4.”

You can download the report here.

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