Solar prices increased quarter-over-quarter and year-over-year in Q2 2021 for the first time since Wood Mackenzie began modeling solar market prices in 2014.
Trade issues, meanwhile, threaten President Biden's goal of generating 45% of electricity from solar energy by 2050. The U.S. government's enforcement of the Withhold Release Order (WRO) on metallurgical-grade silicon (MGS) from companies with facilities in China's Xinjiang region, as well as the possible extension of the Section 201 tariffs on imported solar modules, have added to the uncertainty. Additional tariffs could come, too, from the Antidumping and Countervailing Duties (AD/CVD) case involving companies from Malaysia, Thailand, and Vietnam.
While PPA prices are trending upward, LevelTen doesn't expect demand to soften. According to a survey by the firm, only 12% of solar developers are responding to supply chain pressures by delaying projects.
“ERCOT solar prices have increased by nearly 10% since Q2 2020, driven by steady quarterly increases in pricing at ERCOT’s North, South, and Houston settlement hubs,” Collier said. “Still, ERCOT continues to be the most competitive solar market in the U.S., as abundant land, a unique market structure, and high insolation provide a favorable environment for solar development."