Industry Analysis
Oct 30, 2023

Where Are Solar PPAs Becoming More Attractive?

The value of solar PPAs is declining across ERCOT, except at West hub.

Over the last six months:

  • North hub solar PPAs became $4.50 less valuable to offtakers
  • Houston hub solar PPAs became $2.30 less valuable to offtakers
  • South hub solar PPAs became $1.20 less valuable to offtakers
  • West hub solar PPAs became $1.80 more valuable to offtakers

Whenever the value of a product falls, the offer price of that product needs to fall in tandem for it to remain as attractive to offtakers.

At North hub, for example, solar PPA prices would have needed to fall by $4.50 to stay as attractive as they were at the end of 1Q 2023.

But they didn’t. Instead, they increased by $1.50.

The combination of decreased value and increased price resulted in North solar becoming very unattractive to offtakers at the end of 3Q 2023.

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