The end of federal clean energy tax credits could mean higher PPA prices, experts warn.
July 4 meant more than fireworks: Independence Day was the deadline for wind and solar projects to kick off construction in order to secure investment and production tax credits from the Inflation Reduction Act.
Meaning? The price of PPAs for projects no longer eligible for IRA tax credits could spike, according to industry experts. “It’s kind of a shift from the taxpayer to the ratepayer to make up that delta,” one analyst noted to Utility Dive.
Putting the pressure on utilities and developers: Camelot Energy Group said a 200-MW solar facility with a 30% investment tax credit would need a PPA “in the $40 to $45 per MWh range. But if you’re non-tax advantaged, no ITC basis, then you’re basically pushing mid-to-high $60s.”