U.S. Renewable Energy Marketplace PPA Pricing Trends

Figure 4. Trends in Solar PPA Prices

Solar

Technology

Power Market

Wind 9% Solar 93%

Wind 7%

$20.00 Median PPA Price ($/MWh)

Solar Wind CAISO ERCOT ISO-NE MISO NYISO PJM SPP 2020 Q2 2021 Q2 2021 Q4 2022 Q4 2020 Q4 2022 Q2

$10.00

Market Wind 21% Solar 91%

Prices shown reflect the median of flat, hub-settled, unit contingent offers inclusive of project RECs, received over time. Markets and technologies with offers from fewer than five distinct projects in a given quarter are not shown. Wind PPA price trends are not shown this quarter due to fewer than five wind projects seeking offtake in each market.

• In Q4, median solar PPA prices grew at a much slower rate than in Q3, up 4% ($2/ MWh) across major U.S. markets. In Q3, these markets - which include ERCOT, MISO, PJM, and SPP - experienced a 17% price spike. In comparison to one year ago, median solar PPA prices are now 48% ($18/MWh) higher.

• PJM experienced the only major median solar PPA price increase in Q4, for a gain of 8% ($5/ MWh). Of the four referenced markets, PJM remains the most expensive, with factors like interconnection reform and permitting challenges limiting supply, while demand from corporate buyers and compliance entities remains steady.

$70.00 ERCOT MISO PJM SPP Solar 60% Wind 40% Solar 79%

• SPP’s median solar PPA price dropped 8% ($5/ MWh) in Q4 following its record-setting 29% increase in Q3. The only other solar market to experience a price decrease this quarter was ERCOT, which fell by less than $1/MWh.

• The number of actively marketed projects in Q4 increased 40% over the previous quarter. Following an exceptionally low quarter for project availability in Q3, renewable developers are marketing more projects today, buoyed by clearer guidance on solar panel import tariffs and the long-term certainty established by the Inflation Reduction Act.

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