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But
wind energy prices fell a little in recent months, thanks to
major new federal subsidies.
Fourth-quarter prices on solar contracts, known as power
purchase agreements (PPAs), were up 33.3% on a year before and
8.2% on the previous quarter, according to a quarterly index by
LevelTen Energy that tracks renewable energy deals.
The supply chain constraints have dampened the benefits for
solar developers of President Joe Biden's landmark climate
change law, which late last year extended tax credits for
renewable energy projects.
The Inflation Reduction Act's incentives have breathed life into
the U.S. wind industry. Wind PPA prices were 1.9% lower in the
fourth quarter than in the third - their first decline since
early 2021.
The spike in solar prices resulted from the seizure by U.S.
customs officials of hundreds of shipments of solar energy
components at U.S. ports since June. A law went into effect at
that time banning imports from China's Xinjiang region.
The Uyghur Forced Labor Protection Act presumes that all goods
from Xinjiang are made with forced labor. It permits imports
only if producers prove otherwise by showing sourcing
documentation of equipment back to the raw material.
"Those delays and access to that equipment is introducing
significant amounts of uncertainty on timelines, and therefore
PPA prices are going up to cover that risk," LevelTen Senior
Director of Developer Services Gia Clark said in an interview.
Clark added, however, that demand was still strong for solar
projects and that prices might stabilize in the second half of
2023.
(Reporting by Nichola Groom; Editing by Bradley Perrett)
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