(Reuters) – U.S. solar energy contract prices logged their first quarterly decline in more than three years, according to a report published on Monday, as challenges securing panel supplies eased and projects enjoyed strong demand tied to President Joe Biden’s landmark climate change law.
The 1% drop in the second quarter from the first quarter, though small, marks a possible turning point for an industry that has struggled with supply chain disruptions, inflation and the threat of import tariffs since 2020, according to LevelTen Energy, which tracks renewable energy deals.
“They decreased relatively insignificantly, but a decrease is nothing to scoff at considering the last three years,” Gia Clark, LevelTen’s senior director of strategic accounts, said in an interview.
Compared to a year earlier, solar prices were up 25%.
LevelTen’s index is based on prices project developers are offering customers for power purchase agreements, or PPAs. The report includes six North American markets.
Bucking the national trend, prices in the Electric Reliability Council of Texas (ERCOT) market were up 14% during the quarter as the state legislature considered bills that would have prioritized fossil fuel power generation over renewables. Most of the more restrictive proposals failed to pass.
In a sharp contrast from solar, wind energy prices rose 13% during the period.
Demand for wind is strong, Clark said, but projects are difficult to develop due to lengthy permitting processes and high costs for connecting facilities to the grid. In the Midcontinent Independent System Operator (MISO) market, which includes 15 states in the middle of the country, wind prices were up 24%.
(Reporting by Nichola Groom; Editing by Lincoln Feast.)
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