December 14, 2018 Read More →

Record-low solar PPA deal in Texas

The 15-year contract with Engie-affiliated Long Draw Solar is among the lowest PPA prices confirmed in the U.S. and the lowest confirmed in Texas. The project capacity is 255 megawatts.

Greentech Media previously reported on several projects that rival the New Braunfels PPA. Austin Energy once claimed the record, announced at the end of last year. But the price of that deal was unconfirmed, hovering between $21 and $27.25 per megawatt-hour, according to Colin Smith, a senior solar analyst at Wood Mackenzie Power & Renewables. Projects in Arizona and Nevada have also sunk to $21.55 per megawatt hour (with 2.5 percent annual escalation) and $23.76 per megawatt hour, both for 25-year PPAs.

The Long Draw project will be located in West Texas and is projected to come online in 2020.

Texas is still among the top 10 solar states by megawatts operating and in development, as it was last year. And much like the political environment that surrounded the Austin Energy deal, the Section 201 tariffs are still depressing solar growth. According to WoodMac’s latest Solar Market Insight report, released this week in partnership with the Solar Energy Industries Association, Q3 2018 was the first time since 2015 that utility-scale installations sunk under 1 gigawatt.

Austin Energy’s PPA came just ahead of the Trump administration’s announcement of tariffs in January, when uncertainty was high. At the time, Smith said the shockingly low price was a “bold statement” that the solar industry could ride through the challenges.

Now that the tariff situation has clarified, Smith said solar can continue on a growth trajectory. He called the low quarter “a symptom of this [tariff] hiccup in the marketplace.” But announcements like the one from New Braunfels Utilities indicates the industry is still getting more competitive. In addition to Texas, utilities in states such as New Mexico, Colorado, Arizona and Nevada have seen power-purchase agreement prices below $30 per megawatt-hour.

More: Texas Municipal Utility Signs New Super-Low Solar PPA

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