Edison Vitality mentioned in a brand new report that costs rose extra modestly within the fourth quarter of 2022, in comparison with the excessive worth will increase seen since 2021.
From pv journal USA
In a quarterly report on giant renewable vitality energy buy agreements (PPA), vitality advisory Edison Vitality mentioned costs within the US market continued to rise, albeit at a slower tempo than skilled because the second quarter of 2021.
Monitoring 120 initiatives with industrial operation dates by way of 2026, the report exhibits that PPA costs elevated by 4% within the fourth quarter of 2022. Lots of the deliberate photo voltaic initiatives, with 105 initiatives deliberate in whole. The sluggish worth enhance marks a step down from the 17% enhance within the third quarter of 2022.
In comparison with a 12 months in the past, costs elevated by 48%, or $18/MWh. The PJM grid stays the most costly, with median costs growing by 8% or $5/MWh, within the fourth quarter of 2022. Within the Southwest Energy Pool, the median photo voltaic PPA worth fell 8%, or $5/MWh, within the fourth quarter, after a record-setting 29% enhance within the third quarter.
After an unusually low quarter for challenge availability within the July-September interval, US builders are extra assured about advertising initiatives, with clearer steering on import tariffs and long-term safety from the US Inflation Discount Act. Actively marketed initiatives elevated by 40% final quarter.
By ISO area, the fourth quarter photo voltaic PPA costs are as follows ($/MWh):
The price of uncooked supplies is falling yearly, with copper, aluminum, and North American metal down 15%, 10%, and 64%, respectively. Edison Vitality says decrease materials prices might push PPA costs additional because the impression of value enhancements trickle down the availability chain.
Rising rates of interest additionally contributed to increased costs. The Federal Funds fee, which represents the price of borrowing cash, rose to three.7% for the three quarters ended Sept. 30, 2022, in comparison with near 0% all through the earlier 12 months.
Tasks positioned in service after January 1, 2023, are eligible for credit below the Inflation Discount Act. Not less than, the Funding Tax Credit score offers 6% of the whole value of the challenge and may go as much as 50% if sure wages, indoor, and Vitality Justice are met.
The Manufacturing Tax Credit score, which is obtainable to photo voltaic and wind initiatives, ranges between $5.50/MWh to $33/MWh, additionally relying on the prevailing wage necessities, indoor space, and site of the vitality neighborhood. .
Edison Vitality mentioned that members of the European Union have expressed considerations that the IRA will hinder European corporations, and that it violates worldwide commerce legislation. In response, the US and the European Union established a joint process pressure to handle these considerations. Challenge builders shall be attentive to any potential modifications that will consequence from these conversations in 2023.
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