Growing competition could drive down solar PPA prices by 2026: Enverus

Emma Penrod | Source: Utility DIVE | Posted 03/28/2025

Keyword Tags:

The projected price declines remain dependent on tax credits included in the Inflation Reduction Act, however, an Enverus analyst said.

AI generated summary

According to Enverus Intelligence Research, the prices of solar power purchase agreements (PPAs) may begin to decline by 2026 due to increasing competition among solar developers and a buyer's market. As of 2024, there is sufficient solar capacity in the pipeline to meet demand at prices between $20/MWh and $30/MWh, although current PPA prices hover around $50/MWh in certain regions like New York. The anticipated price drops are contingent on the continuation of policies such as the Inflation Reduction Act tax credits, which are crucial for the financial viability of many solar projects.

While Enverus does not foresee dramatic reductions in PPA costs, the influx of new solar projects has empowered buyers to negotiate more favorable terms, typically favoring shorter-term agreements. The average duration of PPAs has decreased from 20-25 years to 17-19 years. However, the stability of solar supply chains and the potential impact of rising interconnection costs could influence future pricing trends. In contrast, wind PPAs are not expected to experience similar price declines due to physical constraints and political challenges affecting new projects.

Link to Original Article

Please find the link to the full article below. (Please note that content provider might require a paid subscription)

Source Link: https://www.utilitydive.com/news/growing-competition-solar-wind-renewable-energy-ppa-enverus/743631/

Create a free trial account: Sign Up

Grid monitor is free to try. No credit card required

Growing competition could drive down solar PPA prices by 2026: Enverus

AI generated summary

Link to Original Article

Create a free trial account: Sign Up

Already have an account? Login