Market-averaged P25 solar PPA prices increased to $64.49/MWh during the first quarter, representing a year-over-year jump of more than 13%. Wind prices on the same index surged by nearly 8% during the quarter to reach $79.40/MWh, a nearly 24% increase compared to Q1 2025, said a quarterly report from LevelTen Energy.
The upward trend for both technologies follows two previous quarters of price climbs, extending a period of market volatility driven by supply constraints and federal-level friction.
Solar project developers have continued to navigate the clean energy tax cuts provided by the One Big Beautiful Bill Act (OBBBA) with strategic poise, preserving tax credit access for their pipelines through rigorous development work. However, the sector faces a convergence of other challenges, including new tariffs, rising insurance costs, and labor shortages.
Prices in the CAISO market saw particularly sharp increases during the first quarter, which drove the overall rise in continental market-averaged prices. Despite these headwinds, demand for electricity remains high due to an ongoing data center boom, and buyers are continuing to pursue solar electrons and clean energy attributes from wherever they can be sourced, said the report.
The wind sector is facing even more substantial permitting difficulties, with the industry under immense scrutiny from the Trump Administration. Lengthy bottlenecks, especially regarding Federal Aviation Administration (FAA) approvals for turbine height and location, have stalled significant amounts of wind development across the United States.
Geopolitical factors are also weighing on energy markets as the war in Iran drives significant increases in oil prices globally. While skyrocketing oil prices have caused pain at the gas pump, the U.S. supply of natural gas has remained relatively unimpacted, with Henry Hub benchmark prices holding largely steady through late March. Because natural gas typically sets the marginal price for power, electricity prices across the country have not yet seen major impacts from the conflict, though long-term effects remain uncertain.
The PPA market currently reflects a two-sided story where the largest corporate players are hastily procuring large volumes of clean power while other buyers remain hesitant, said LevelTen Energy. This hesitation stems from ongoing price increases and uncertainty regarding pending updates to the Greenhouse Gas Protocol (GHGP). Different grid operator frameworks for meeting system reliability are evolving in divergent ways, particularly regarding standards for accredited capacity. To mitigate these risks and meet facility online dates, buyers are increasingly looking to portfolios of clean power resources like solar, storage, wind, and demand-response assets, said the report.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.