A report from LevelTen Energy shows that North American solar PPA prices increased 4.6% in the first quarter of 2026 as developers navigate a complex regulatory and geopolitical environment.
Market average solar energy PPA Awards rose to $64.49/MWh during the first quarter, representing a year-over-year increase of more than 13%. Wind prices on the same index rose almost 8% during the quarter to reach $79.40/MWh, an increase of almost 24% compared to the first quarter of 2025. quarterly reporting from LevelTen Energy.
The upward trend for both technologies follows two previous quarters of price increases, extending a period of market volatility driven by supply constraints and friction at the federal level.
Solar project developers have continued to navigate the clean energy tax credits provided by the One Big Beautiful Bill Act (OBBBA) with strategic balance, maintaining access to tax credits for their pipelines through rigorous development work. However, the industry is facing a confluence 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, driving the overall increase in average prices in the continental market. Despite these headwinds, demand for electricity remains high due to the ongoing data center boom, and buyers continue to pursue solar electrons and clean energy wherever they are available, the report said.
The wind sector faces even more substantial permitting challenges, with the sector under significant scrutiny from the Trump administration. Longstanding bottlenecks, especially regarding Federal Aviation Administration (FAA) approval for turbine height and location, have stalled significant amounts of wind development in the United States.
Geopolitical factors are also weighing on energy markets, as the war in Iran leads to significant increases in global oil prices. While skyrocketing oil prices have caused pain at the gas pump, U.S. natural gas supply has remained relatively unaffected, with Henry Hub benchmark prices largely stable through the end of March. Because natural gas typically sets the marginal price for energy, electricity prices across the country have not yet been significantly affected by the conflict, although the long-term effects remain uncertain.
The PPA market currently reflects a two-sided story in which the largest corporate players are rushing to purchase large amounts of clean energy, while other buyers remain hesitant, according to LevelTen Energy. This hesitation stems from continued price increases and uncertainty about upcoming updates to the Greenhouse Gas Protocol (GHGP). Grid operators’ various frameworks for meeting system reliability are evolving in diverse ways, especially when it comes to standards for accredited capacity. To mitigate these risks and meet online facility data, buyers are increasingly looking to portfolios of clean energy sources such as solar, storage, wind and demand response assets, the report said.
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