The average cost of power purchase agreements (PPAs) in North America jumped 6.6 percent during the first quarter of 2023, transaction infrastructure company LevelTen Energy found.
Solar PPA prices have risen by 8.5 percent since the end of 2022, while wind prices rose 4.9 percent during the same time period after falling slightly in the fourth quarter of last year.
Rob Collier, vice president of Energy Marketplace at LevelTen Energy, told Utility Dive that the collapse of Silicon Valley Bank caused uncertainty in the renewables market, but likely only had a marginal impact on prices.
The Uyghur Forced Labor Prevention Act and the US Senate's efforts to overturn a Biden Administration moratorium on solar tariffs related to imports from four Southeast Asian countries had a larger impact, Collier believes.
Interconnection backlogs and the price of interconnection upgrades are also major factors. But Collier noted that there were myriad reasons for uncertainty, supply chain issues, and cost variations.
Another clear reason is that demand for renewable energy has continued to grow, despite two years of PPA price increases.
The Inflation Reduction Act has begun to boost supply, and recent guidance from the IRA has clarified who will get a 10 percent tax credit adder for projects in fossil fuel-producing communities, but it is too early to have been reflected in PPA prices.
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