LevelTen Energy reports stable solar PPA prices for US market

In a recent research, LevelTen Energy notes that solar power purchase agreement (PPA) prices in the US have stabilized, pointing to increased stability following a period of market turbulence.

After years of instability in the energy market, PPA marketplace specialist LevelTen Energy has produced a pricing analysis for the first quarter of 2024, indicating better price stability.

The 25th percentile of all PPA prices, or P25 pricing, is the basis on which LevelTen Energy presents its data. Over the course of the quarter, P25 wind prices increased by 2.4% while P25 solar prices decreased by 1.5%.

According to LevelTen Energy, developers were able to offer cheaper costs during the quarter due to a mild winter, an abundance of solar modules, and market expectations for reduced loan rates.

It did note, however, that given the ongoing increase in demand for data centers and the economy-wide electrification, this window of opportunity is not expected to endure indefinitely.

“More corporations are entering the PPA buyer pool as 2030 sustainability deadlines approach,” said Sam Mumford, energy modeling analyst for LevelTen Energy.

“Trade restrictions could impact pricing soon as President Biden’s two-year tariff moratorium on PV components shipped from certain Southeast Asian countries ends in June.

Heightened government scrutiny on the solar supply chain could increase costs for developers – with the potential for PPA pricing impacts.”

Texas is the biggest market for utility-scale solar, and LevelTen Energy said that P25 solar costs fell 1.6% during the quarter.

According to the business, the market is still seeing good pricing trends, with steady amounts of high-value offers combined with advantageous future capture prices.

California P25 prices fell 12.7% in the first quarter of 2024, a significant reduction. According to LevelTen Energy, a large number of reasonably priced projects under 50 MW that joined the LevelTen marketplace in the first quarter were the primary cause of the price decrease.

42 PPAs totaling approximately 98 million MWh of clean electricity from solar and wind were made possible by LevelTen Energy in 2023. According to the firm, that number will increase in 2024.

The business stated that it views the current prices as a window of opportunity for purchasers, with prices perhaps rising in the near future due to competition for PPAs and the impending Scope 2 emissions restrictions.

For its clients, LevelTen Energy has created an expedited negotiation procedure that reduces the usual 12-month (or more) PPA negotiations to roughly 100 days.

In a collaboration with Google, the expedited procedure known as LEAP has resulted in the procurement of 1.5 GW of renewable energy.

“While prices are relatively stable this quarter, they remain high, and companies need options,” said Mumford. “Bundling PPAs and clean energy tax credits together is an emerging alternative for buyers that can make their procurements more financially sustainable.”

Source LevelTen Energy

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