LevelTen Energy’s Q3 2024 North American PPA Price Index Report highlights trends in the renewable energy sector, showing a rise in solar prices while wind prices remained steady.
Solar Power Purchase Agreement (PPA) prices rose by 5.4 percent during Q3, with a rise of 10.4 percent. The increase is driven by rising development costs, partially due to tariffs on Chinese solar panels, pushing developers to source higher-cost alternatives from other countries or domestically.
After a 7 percent rise in Q2, wind PPA prices remained flat in Q3. However, they have increased by 14.1 percent year over year. Market challenges such as land availability, community opposition, and inflationary pressures continue to impact the wind sector.
Trade complexities and tariffs on solar equipment, coupled with political uncertainty regarding the Inflation Reduction Act (IRA), create challenges for the renewables sector. While policy experts predict that a full repeal of the IRA is unlikely, any changes could have major implications for project financing and development.
Demand for renewable energy remains strong, particularly as industries like AI and data centers seek reliable, clean power to meet decarbonization goals. This competition for renewable energy is expected to grow as more sectors push for sustainable energy solutions.