The One Big Beautiful Bill Act (OBBBA) is already echoing through the clean energy landscape - nowhere more clearly than in ERCOT. In this post, we unpack how the OBBBA’s curtailment of long-term tax credit certainty is causing a sharp drop in expected renewable buildout, and what that means for the pricing of Power Purchase Agreements (PPAs) and Battery Energy Storage System (BESS) tolling deals.

Solar PPA Values Jump, But BESS Revenue Takes a Hit

The immediate effect of a slower renewables buildout under OBBBA is a tightening of supply during critical midday hours. With less solar coming online, ERCOT’s famous “duck curve” flattens, elevating midday prices and reducing intra-day volatility. This shift materially impacts asset economics.

Solar PPA values increase by 16%, rising from $42.81/MWh to $49.89/MWh for projects with COD in 2027.

Wind PPA values see a more modest gain of 5%, from $47.01/MWh to $49.42/MWh, reflecting wind's broader generation profile.

BESS TB2 toll values fall by 10%, from $8.34/kW-month to $7.52/kW-month, driven by a narrowing of the arbitrage window.

Improved Solar Capture Rates

Under high-renewables scenarios, midday power prices are suppressed by an abundance of cheap solar MWh. In the post-OBBBA world, that overbuild never materializes, and as a result, solar generation better aligns with elevated price periods.

Solar capture factors improve by over 6%, increasing the value of each solar MWh produced relative to the average market price.

This dynamic not only improves merchant economics but also supports stronger long-term offtake pricing for solar projects with CODs in the late 2020s.

BESS Arbitrage Narrows: Higher Charging Costs, Lower Revenue

For battery storage, the OBBBA introduces new headwinds.

Charging costs increase by 30–40% by 2030. The average cost rises from $10.20/MWh in the High Renewables case to $13.25/MWh post-OBBBA.

Discharging revenues dip as well: top-hour LMPs fall from ~$170/MWh to ~$160/MWh, and low-value discharge events become 50% more likely.

The net result? TB2 spreads, a key proxy for toll revenue opportunity, decline by $14/MWh or 8% on average between 2026–2033. While 2026 remains relatively stable, the declines become pronounced from 2027 onward, coinciding with the first wave of reduced renewable additions.

Long-Term Market Implications

The OBBBA accelerates a divergence between the value trajectories of renewables and storage. While solar benefits from a tighter supply-demand balance in the short- to medium-term, BESS assets - previously reliant on deep midday troughs and steep evening ramps - face diminishing arbitrage opportunities.

That said, the story isn’t uniformly negative for storage.

ERCOT’s load growth continues to outpace supply, providing a long-term floor for energy volatility.

The BESS buildout is expected to increase by 2.5 GW, even as solar+wind additions fall by 25 GW under the post-OBBBA scenario.

Conclusion: Risk, Reward, and Repricing

For market participants, the OBBBA serves as a reminder that federal policy shifts can have fast and far-reaching implications for offtake pricing. Solar PPA valuations have benefited from a market rebalancing, while BESS tolls are recalibrating to a new arbitrage reality. As always, success in ERCOT will depend on understanding how policy-induced macro shifts ripple through market economics - and acting accordingly.

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