Industry Analysis
Jan 24, 2024

How Did Our Reference North Hub Solar PPA Change in 2023?

North Hub solar PPA value decreased 4% over the course of 2023.

We know this because we calculate a SWRV (Shape Weighted RenewaFi Value) for reference solar and wind PPAs in ERCOT every day.

These daily value estimates help us see trends in the market for ERCOT PPAs.

They also have countless other applications, from providing a pricing benchmark to monitoring past transactions.

We calculate SWRV by converting monthly block prices (provided by a third-party) into estimated hourly prices. We look at hourly pricing trends over the past three years to make this conversion.

For unit contingent deals, we also calculate a co-variance factor, which reflects the generally inverse relationship between renewables generation and price.

This helps us calculate a discount for unit contingent structures when compared to fixed shapes.

For more on our SWRV methodology, see here:

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