Here are 10 key points on how solar developers are feeling the heat and the major PPA trends emerging post-OBBBA, based on the LevelTen Energy report:
PPA prices are rising – The same projects saw a 4 percent price jump pre- and post-OBBBA, with the lowest offers climbing by about $8/MWh, reflecting increased compliance costs and tighter timelines.
Timelines have collapsed – Deals that once took several months now close in a matter of weeks as developers race to lock in buyers before tax-credit-eligible capacity is gone.
Tax-credit pressure – The bill’s compressed deadlines have made federal incentives harder to secure, forcing developers to prioritize shovel-ready projects and shelve less mature assets.
Pipeline reshuffling – 86 percent of developers have changed strategies, accelerating construction or shifting resources to projects most likely to meet new qualification rules.
FEOC compliance hurdles – Developers face added complexity in sourcing components outside China and other “Foreign Entities of Concern,” with many scrambling to prove supply chain eligibility before restrictions take effect in 2026.
Financing uncertainty – Lenders and investors are focusing on projects that can qualify for full tax credits, leaving early-stage projects at greater risk of stalling.
Industry consolidation risk – Smaller developers with fewer resources are more vulnerable, while larger players may acquire stranded projects or struggling competitors.
Buyers moving fast – 68 percent of procurement teams report more urgency to act, with competitive projects going into exclusivity in days or weeks, not quarters.
Risk-sharing in contracts – Both developers and buyers are turning to price indexation, risk carve-outs, and more conservative pricing to manage post-OBBBA market volatility.
Future price trajectory – Without tax credits, solar PPA prices could rise by $8–$17.50/MWh to remain financeable, signaling that today’s “high” prices may look cheap in a few years.
Based on the LevelTen Energy post-OBBBA survey, solar developers have responded in several notable ways:
Strategy shifts are widespread – 86 percent of surveyed developers said they are altering their approach, mainly by accelerating construction timelines or reprioritizing project pipelines.
Accelerating construction – Nearly half (46 percent) plan to start construction on as many assets as possible before year-end 2025 or the July 5, 2026 deadline, to secure tax credits and avoid FEOC restrictions.
Selective project starts – 40 percent will focus only on projects likely to meet the new OBBBA requirements, shelving or slowing others.
Pipeline triage – Many are scrutinizing their portfolios for tax-credit eligibility, with a large share expecting only 25–50 percent of their pipeline to fully qualify.
Increased focus on acquisitions – 52 percent intend to acquire projects from others, particularly those closer to meeting the new milestones.
Project suspensions – 29 percent expect to divest, terminate, or suspend early-stage projects that now appear unviable under the new rules.
FEOC compliance planning – Most are working to source components outside China and other restricted nations before January 1, 2026, with varying confidence in their ability to meet the “material assistance” thresholds.
Risk-mitigation in contracts – 67 percent plan to use risk-sharing clauses, and 60 percent expect to adopt more conservative pricing in future PPAs.
Changing buyer mix – 34 percent foresee working with more hyperscalers, while 30 percent expect more deals with utilities and load-serving entities.
Financing constraints – Many report that project finance partners are only willing to back projects with full tax-credit eligibility, putting early-stage solar at greater risk of stalling.
Baburajan Kizhakedath