Tariffs raise solar prices as wind permitting remains stalled
LevelTen Energy’s Q3 2026 North American PPA Price Index Report is now available for subscribers.
Each quarter, the LevelTen Energy PPA Price Index reports the prices that wind and solar project developers have offered for power purchase agreements (PPAs) on the LevelTen Energy Marketplace, the world’s largest collection of PPA price offers.
This quarter’s edition includes a deep dive into the market impacts of ongoing revisions to the Greenhouse Gas Protocol (GHGP) and Science Based Targets Initiative (SBTi).
Key insights from the report include:
Solar Prices up in Q3
P25 solar prices on LevelTen's Continental Index rose by 4.9% during Q3. LevelTen's Core-Markets P25 Solar Price, a new metric introduced this quarter, rests at $64.23/MWh. Read more about our new methodology in the report.
Development conditions remain challenging across many project elements, but Q3's primary pricing factor was clear: the Section 232 tariffs announced in early August.
The tariffs are sweeping, applying to all layers of the solar supply chain: polysilicon, ingots, wafers, cells, and modules. By combining a 15% blanket tariff with a Minimum Import Price (MIP) that brings all components to levels comparable to domestically produced counterparts, analysis shows the levies pushing up imported module prices by more than 40%.
While the tariffs don't go into effect until December, the US Department of Commerce has already taken measures to prevent what it deems to be stockpiling of polysilicon and its derivative products. In the meantime, developers are starting to fold the tariffs' sizable impacts into prices.
Wind's Challenges Continue
Wind prices on LevelTen's Continental Index remained essentially flat quarter over quarter, declining by 0.1%. LevelTen's Core-Markets P25 Wind Price for Q3 came in at $68.27/MWh.
Wind prices went up in most markets, but a modest decline in ERCOT wind prices countered the impact of rising prices elsewhere due to ERCOT's substantially larger offer pool, and the greater influence it consequently exerts on the Continental Index.
The same Section 232 tariffs impacting solar imports are also applying duties on steel, aluminum, and some copper products that are pushing up the cost of wind development. But far more impactfully, a large swath of US wind projects remain in limbo as the Federal Aviation Administration and Department of Defense remain unwilling to issue Determination of No Hazard (DNH) permits and mitigation agreements to wind projects — both of which are essential to development progression. With the US wind pipeline unable to replenish, some buyers are looking to operational wind projects to secure wind capacity with less risk.
Framework Revisions and Tax Credit Policy Clashing
Both federal policy and voluntary frameworks for corporate climate action assert immense influence on the US PPA market. The first dictates tax credit policy and, by extension, the playing field for project financing and development. Meanwhile, frameworks from the Greenhouse Gas Protocol (GHGP) and Science Based Targets Initiative (SBTi) guide corporate decarbonization strategy and procurement decisions.
At present, these two domains are deeply misaligned. Ongoing revisions to the GHGP have led to many corporates pausing procurement activity, awaiting greater certainty. But US developers must place their projects into service by the end of 2030 to receive tax credits. Since PPAs are often a prerequisite for project financing, developers need buyers to show up soon if safe-harbored project supply is to reach the finish line — and provide buyers with IRA-era economics.
A Tale of Two Markets
It's no secret that the market's largest, most sophisticated buyers — most of whom are pursuing data center energization targets — have dominated the PPA landscape over the last year. But there are good reasons for other buyers to jump back in the market soon.
Amid ongoing GHGP revisions, final guidance from the SBTi landed in June, providing a touch of clarity in an otherwise ambiguous landscape. While foregoing an hourly-matching mandate, SBTi V2.0 pushes buyers to procure RECs from within their "deliverability regions," which are largely interpreted to be their specific grid regions of operation. But SBTi's legacy provisions allows contracts signed before February 1, 2027 to forego this requirement, providing a brief but golden window for buyers to seize.
Interested in learning more? A free executive summary of the report is available here.
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