The latest Q4 2025 PPA price report from LevelTen Energy shows that North American renewable energy markets are navigating a complex landscape of rising costs, regulatory uncertainty, and evolving buyer dynamics.
Solar PPA Prices Climb 3.2 Percent in Q4
In Q4 2025, solar PPA prices on LevelTen’s Market-Averaged Continental Index rose by 3.2 percent, following a 4 percent increase in Q3. On a year-over-year basis, solar PPA prices have increased nearly 9 percent, reflecting continued demand and ongoing project cost pressures.
Not all markets experienced gains, with a few reporting modest quarterly declines. Developers are gaining more clarity around tariff impacts, tax credit reductions under the One Big Beautiful Bill Act (OBBBA), and other costs, helping them calibrate prices more accurately and remove prior risk premiums. This clarity allows some projects to adjust pricing downward while maintaining transactable deals.
Wind PPA Prices Fall 1 Percent in Q4
Wind PPA prices experienced a 1 percent decline in Q4, after a 5 percent increase in Q3. Despite the drop, wind PPA prices are also up nearly 9 percent year over year.
Price declines are driven by multiple factors, including market-specific pricing dynamics and high regulatory volatility. For instance, some Independent System Operators (ISOs) are seeing more PPA offers with negative Projected Settlement Values (PSVs), limiting buyer tolerance for downside risk.
Conversely, strong markets like ERCOT in Texas continue to see rising wind PPA prices, up more than 19 percent year over year, fueled by a boom in data center and energy development that places a premium on available wind capacity.
Post-OBBBA Market Adjustments
The latter half of 2025 saw developers reprioritizing projects for a post-OBBBA landscape. LevelTen surveyed developers with pipelines exceeding 230 GW, finding that over three-quarters of projects expected to operate before 2029 would retain access to tax credits.
However, regulatory headwinds persist: Section 232 tariffs, stricter federal permitting procedures, and pending Foreign Entity of Concern (FEOC) rules continue to raise development costs and complicate tax credit eligibility.
Corporate Buyers Navigate Uncertainty
Tech-sector buyers, particularly data centers, are aggressively signing deals to leverage battery storage for firm power and capacity. At the same time, many corporate buyers are waiting on revised Greenhouse Gas Protocol (GHGP) Scope 2 standards, expected in 2027 and phased in by 2028.
Proposed GHGP updates could introduce stricter inventory accounting rules, affecting renewable procurement strategies and contract structures. LevelTen emphasizes the importance of industry participation in shaping these standards, as the GHGP remains the benchmark for 97 percent of companies tracking emissions.
BABURAJAN KIZHAKEDATH
