LevelTen Energy’s Q4 North American PPA Price Index Report, which is now available for subscribers, showed largely stable prices for solar and a slight increase for wind power purchase agreements (PPAs) in Q4 of 2024.
Solar Prices Hold Steady in Q4
Q4 2024 saw P25 solar PPA prices on LevelTen’s Market-Averaged Continental Index move up by a modest 0.3% quarter over quarter. This price movement was muted by a significant 14.5% price drop in Alberta. Removing Alberta (AESO) from the Q4 Market-Averaged Continental Solar Index reveals a more substantial 3.3% quarterly rise in solar PPA prices across the US. In the United States, four out of five of the ISOs featured on this quarter’s Solar Index exhibited upward price trends.
The increase in solar pricing in the United States may be related to uncertainties around tariffs, tax credits, and transmission build-out. However, PPA counterparties are making use of contractual terms that can account for an array of policy risks that may — or may not — materialize during 2025 and beyond.
Wind Prices Rise in Q4
After remaining flat during Q3, P25 wind prices on LevelTen’s Market-Averaged Continental Index rose by 3.3% in Q4. On a year-over-year basis, they have risen by 13%.
President Donald Trump has advocated for ending offshore wind development and supporting “a policy where no windmills are being built.” While it has yet to be seen how much the Trump administration will actually hinder wind development in practice, this regulatory uncertainty may have contributed to Q4’s rising wind PPA prices.
Wind power’s unique ability to provide clean energy during nighttime hours makes it a particularly coveted generation type for tech companies and data center providers. Given the continually growing energy needs of AI, there is little doubt that motivated, sophisticated buyers in the tech space will continue vying for wind capacity to meet their expanding AI needs.
Regulatory Uncertainty Predominates
While November’s election results have raised concerns around tariffs and the future of the Inflation Reduction Act’s (IRA) tax credits, clean energy simply remains good business for both sides of the political aisle. The massive waves of investments catalyzed by the IRA have flowed mostly to Republican districts, making a full repeal of the law unlikely. And while some modifications to tax credits are certainly likely, House Speaker Mike Johnson (R-LA) has signaled a need to “use a scalpel and not a sledgehammer” when it comes to revisiting the law. There is also optimism in the industry around permitting reforms that could speed the pace of project development.
The PPA market has grown accustomed to accounting for tariffs, either directly in PPA prices or through tailored contractual terms. Time alone will reveal which policies ultimately come into effect, but the PPA market has proven time and again that it can successfully adapt to a variety of market conditions.
PPA Market Going Strong
Despite this regulatory uncertainty, the industry is moving forward building and buying clean energy as usual, and is avoiding any preemptive reactions until material policy shifts emerge. One option to deal with uncertainty around tariffs and tax credits is to include contract terms that allow PPA price adjustment or COD delays based on specific criteria, which can provide some degree of future-proofing.
Demand for clean electricity continues to skyrocket, driven by continued electrification and fast-growing data center power needs. Buyers with line-of-sight to a signed PPA are encouraged to move forward expeditiously before any further complexities emerge. With growing data center needs pushing up demand and the development landscape moving into less-certain waters, the market seems likely to shift further in favor of large, sophisticated buyers who can procure at scale and with speed. Smaller buyers with solid options at hand should secure these deals soon.
Increasingly, savvy corporate buyers are integrating more tools into their sustainability strategies — like tax credit transactions that support broader procurement initiatives. LevelTen’s Tax Credit Marketplace provides buyers with access to an expansive pool of tax credits from the nation’s largest renewable developer community.
Subscribers of the PPA Price Index can log in to the LevelTen Platform to read the full report. Not a subscriber? Contact us today to get access.
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