T&D World: U.S. Demand for Renewables Accelerates, Says Edison Energy

Despite ongoing supply chain constraints, U.S. demand for renewable electricity accelerated in Q2 of 2023. Buyers’ appetite was fed by increased certainty around the tax credits in the Inflation Reduction Act, as the IRS issues final guidelines for their use, according to Edison Energy’s Q2 Global Renewables Market Update. (Edison does business in Europe as Altenex Energy and Alfa Energy.)

U.S. median power purchase prices saw a drop this quarter, driven by a 30% jump in ERCOT wind and solar project inventory. Most solar developers have still not seen relief around supply chain pricing constraints, however, with high interest rates and increasing interconnection costs putting pressure on prices. While quarterly price increases have become commonplace over the past two years, Q2’s solar pricing demonstrates some moderation in the market. 

Solar purchase prices increased, though modestly, in all markets. Wind prices fell in both ERCOT and SPP, with a sharp 20% drop in SPP, driven by a small sample size and the addition of several competitively priced projects since last quarter. However, wind offers accounted for a minority of total North American projects at 14%.