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United States Procurement News Notice - 89249


Procurement News Notice

PNN 89249
Work Detail LevelTen Energy says in a new report that US solar power purchase agreement (PPA) prices rose 3.3% in the fourth quarter, possibly due to policy uncertainty. LevelTen Energy, a PPA marketplace operator, has released its fourth-quarter “PPA Price Index” report. It said that solar PPA prices increased by 3.3% in the United States in the last three months of 2024. “The increase in solar pricing in the United States may be related to uncertainties around tariffs, tax credits, and transmission buildout,” said the report. Price data is aggregated and reported in percentile buckets. For example, “P25” refers to the most competitive 25th-percentile offer price. Solar P25 PPA prices averaged $50/MWh based on LevelTen’s continental index report. Wind P25 PPA prices similarly averaged $49.75/MWh. “A power purchase agreement is a long-term contract between energy buyers (offtakers) and energy suppliers. PPAs define the price that an energy supplier will receive for every megawatt-hour (MWh) of energy generated from a renewable energy asset,” said LevelTen. “They also outline the amount of electricity to be supplied, the length of the agreement and details such as transmission issues and insurance.” LevelTen noted that the 2024 US presidential election results have raised concerns about tariffs and the future of the US Inflation Reduction Act’s tax credits for renewable projects. It said that while these risks have emerged, “clean energy simply remains good business for both sides of the political aisle.” The report said that despite these market headwinds, there is optimism in the industry for permit reform, leading to an increased pace of project development. “The PPA market has grown accustomed to accounting for tariffs, either directly in PPA prices or through tailored contractual terms,” said LevelTen. “Time alone will reveal which policies ultimately come into effect, but the PPA market has proven time and again that it can successfully adapt to a variety of market conditions.” It said one option for addressing uncertainty around tariffs and tax credits is to include contract terms that allow PPA price adjustment or cost-of-delays based on specific criteria, which it said would provide some degree of future-proofing. LevelTen said that demand for clean energy remains strong. “Despite this regulatory uncertainty, the industry is moving forward building and buying clean energy as usual and is largely avoiding any preemptive reactions until material policy shifts emerge,” said the report.
Country United States , Northern America
Industry Energy & Power
Entry Date 31 Jan 2025
Source https://www.pv-magazine.com/2025/01/29/us-solar-ppa-prices-rise-3-3-in-q4/

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