Industry Analysis
Jan 25, 2024

Comparing Solar PPA Value Trends Across ERCOT's Hubs

The value of our reference solar PPAs in ERCOT declined slightly in 2023. But the minimal change masks a more complicated story.

Traders' increasingly lower valuation of on-peak power futures reflected their expectations of a worsening 'duck curve' in ERCOT. The further traders looked into the future, the less they valued on-peak power.

The result for solar PPAs was that the first few years became more valuable to offtakers, while the later years became a lot less valuable.

Net, the devaluation of the long-term outweighed the appreciation of the short term, hence the value trends shown below.

Specifically, here's how the values changed from January to December, according to our SWRV methodology:

  • Houston Hub: -6% (from $51.14 to $47.88)
  • North Hub: -4% (from $45.42 to $43.61)
  • South Hub: -1% (from $40.99 to $40.70)
  • West Hub: -1% (from $41.42 to $41.04)

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