Q3 2019, the LevelTen Marketplace saw a continued fall in solar prices and a continued rise in wind prices
LevelTen put out its Q3 2019 PPA Pricing Index, which comprises U.S. solar and wind energy purchase price agreement (PPA) breakdowns throughout the quarter, in addition to developers’ forecasts for 2020 prices.
To ascertain how PPA offer deals have changed from Q2 2019, LevelTen examined information on roughly 600 price offers from over 360 renewable energy projects across the U.S.
Annually, wind prices increased 11.2%. Relative to Q2, Wind prices increased $1.08/MWh, or 4.4%. The MISO economy was the main contributor amounting to a 19% growth (a $4+ rise in prices) in Q3.
But, solar continued its long-term trend of decreasing prices, the report states. Solar prices dropped 0.14/MWh, or 0.5%, in Q3. Annually, solar costs dropped 5.4%. Contrary to the wind market, the MISO market carried the greatest drop in solar rates, with a 3.7% reduction in Q3 following a 2.9% fall in Q2.
Additionally, deal terms became shorter from Q2 to Q3 2019: Wind contracts decreased from 13.5 to 13 years and solar contracts decreased from 14.0 to 13.9 years, on average.
LevelTen also conducted a survey of 33 utility-scale renewable energy developers with active projects in the LevelTen Marketplace. When asked if they anticipate PPA costs to increase or decrease in 2020, 41% predicted they’ll remain about the same. Meanwhile, 35% stated they will fall, and 21% stated they’ll increase (in comparison to a even divide at 27% last quarter). Additionally, 3% said there’s too much doubt to reply and it will be dependent on the marketplace.
When asked what would have the most significant effect in PPA offer prices in 2020, 24% stated competition from other projects. 24% stated the expiration or phase-down of national tax credits would have the largest effect. While 9% stated federal/state policy would be the largest influencer.
Rob Collier, Vice President of Developer Relatons at LevelTen Energy says, “There’s early indicaton that developers may be concerned about increasing prices.”
LevelTen is a marketplace that matches potential buyers with renewable energy suppliers to lower prices and expand the market for sellers.
Check out the rest of their report here.
