According to a study released late Wednesday, U.S. solar energy prices jumped 8.1 percent in the second quarter as projects were held by a Commerce Department inquiry into tariffs on Southeast Asian items and increasing input costs.
According to a quarterly index by LevelTen Energy that analyzes renewable energy transactions, the increase over the time amounted to a stunning 29.7 percent increase in the total price of wind and solar contracts, known as power purchase agreements (PPAs), from the previous year.
Solar PPA costs are up 25.7 percent from last year.
Economic, logistical, and labor market disruptions have intensified since Russia’s invasion of Ukraine, erasing a decade of cost reductions in the renewable energy industry.
Wind contract expenses increased by 2.5 percent during the quarter and by 33.7 percent year on year. Wind rates in the Southwest Power Pool increased by 16 percent during the quarter, owing to a shortage of transmission capacity. The grid operator serves some of the windiest sections of the country, including Nebraska, Oklahoma, and Texas.
LevelTen said it was too early to tell if US President Joe Biden’s decision in early June to eliminate tariffs on solar panels from the four Asian countries implicated in the investigation for two years will relieve some of the cost pressure.
In a poll of 50 developers conducted by the business, roughly one-third said that they required more guarantees that tariffs would not be imposed retrospectively if the Commerce Department implemented them after the two-year delay.
According to LevelTen, the greater cost of wind and solar contracts for corporate and utility clients has mirrored that of wholesale energy rates, which are linked to the growing cost of natural gas.