The latest Q1 PPA price index report from LevelTen Energy has indicated that the North American Power Purchase Agreement (PPA) market remains strong and resilient, with clean energy buyers and sellers continuing to advance deals marked by creativity and collaboration.
The LevelTen Energy Platform recorded a Request for Proposal (RFP) volume of 13 million megawatt-hours in Q1 2025. Lessons from the pandemic era have led to the development of more flexible and protective contractual terms, which are still shaping PPA negotiations. These include price adjusters to manage tariff risks, change-of-law clauses, and a rise in Trade Event provisions within Force Majeure clauses to address unpredictable executive actions.
While PPA contracting remains complex, parties are adapting with innovative approaches to reach successful agreements. However, with future market conditions uncertain, buyers are encouraged to remain flexible and responsive to the financial needs of developers.
Solar PPA
In Q1 2025, P25 solar Power Purchase Agreement (PPA) prices across North America ranged from $44.00 in ERCOT to $116.06 in NYISO, with market-averaged prices remaining largely stable, increasing by less than 1 percent. Despite attention on new tariffs imposed by the Donald Trump Administration on various U.S. trading partners, the pricing stability suggests that the full impact of these tariffs has yet to be reflected in developers’ capital expenditure expectations.
The data set includes offers submitted between December 15, 2024, and March 15, 2025, some of which predate the tariff implementation. In regional markets, CAISO saw a 5 percent quarter-over-quarter drop in PPA prices, though prices were still up over 35 percent year-over-year, influenced by limited hub-settled PPA deals and a new interconnection queue process creating added uncertainty. Meanwhile, Alberta (AESO) experienced a 7 percent quarterly increase in solar PPA prices, but prices were still down 15 percent year-over-year, reflecting market volatility as the region recovers from previous policy constraints.
Wind PPA
In Q1 2025, P25 wind Power Purchase Agreement (PPA) prices ranged from $40.00 in SPP to $76.00 in PJM, with PJM maintaining the highest wind PPA prices in North America for the past year. Overall, wind prices in PJM have remained stable with less than a 1 percent change year-over-year, though several development headwinds are keeping prices elevated. These include restrictive state-level policies, such as in Ohio, where local jurisdictions can easily block projects, limited land availability, and a congested interconnection queue.
While PJM has implemented reforms to streamline its queue-study process, the effectiveness of these changes in managing the volume of grid-connection requests remains to be seen. In contrast, MISO saw wind PPA prices decline by 8 percent in Q1, driven in part by the entry of new low-priced offers with commercial operation dates (CODs) in 2029, which contributed to the ongoing downward pricing trend in the region.
Baburajan Kizhakedath