LevelTen Q1 PPA Price Index Reveals Increased Competition and Cost Reductions as Key Drivers in Decreasing PPA Prices
May 08, 2019
Every quarter, LevelTen Energy provides an in-depth look at power purchase agreement (PPA) offer price averages submitted through the LevelTen Marketplace, for both wind and solar projects, in five independent system operator (ISO) regions, including CAISO, ERCOT, MISO, PJM and SPP, in the United States. The following are a handful of key takeaways from Q1 2019:
- Across markets, an evenly-weighted index of P25 wind and solar prices decreased $0.39/MWh, or 2.3% quarter-over-quarter.
- Solar prices decreased in all markets except MISO, with the largest decreases coming from CAISO, PJM and ERCOT, and only moderate decreases in SPP.
- Overall wind prices also decreased, but not as significantly as solar prices. ERCOT and SPP saw material decreases in their prices, while CAISO, MISO and PJM saw slight increases.
This quarter, in addition to reporting on how much prices have changed, we also examined why they changed. We conducted a survey of 40 utility-scale renewable energy project developers to find out which market factors impacted their offer prices the most in Q1. The results revealed that increased competition among developers and changes in engineering, procurement and construction (EPC) costs had the greatest impact.
In the developer survey, we also explored whether or not changes to federal renewable energy tax credits would affect future renewable energy project development.
To see the full results, download the report below.
Up-to-date data is always the most useful—so LevelTen publishes its PPA Price Index on a quarterly basis. However, PPA prices represent only a fraction of the data required to effectively evaluate PPA opportunities. For real-time analysis of project value and risk, cash flow modeling, price curves and more, project developers and potential renewable energy buyers are encouraged to request access to the LevelTen Marketplace.