Power purchase agreement (PPA) prices are set to continue to rise in the short-term, “as demand outpaces supply” in North America.
This is the opinion of Geoffrey Lehv, SVP and head of North American accounts at US insurer kWh Analytics, who spoke to PV Tech recently about trends in PPA deals. His comments follow North America seeing average solar PPA prices tick upwards 3.2% between the third and fourth quarters of 2025, and Lehv said that significant demand for electricity will continue to affect the North American offtake market “in the short-term”.
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“One Ohio utility, for example, has projected an additional 28GW of peak demand within five years, which is nearly 70% of the load growth experienced over the previous century,” Lehv told PV Tech. “Localised price increases in such markets have significantly outpaced national averages.
“At the same time, supply constraints persist: gas turbine delivery timelines have reportedly stretched from roughly two years to as much as five, limiting the speed at which conventional generation can respond.”
Lehv also pointed to challenges faced by the renewable energy industry in particular, as solar developers try to meet this demand for new power generation. He named “land acquisition, siting and interconnection” as key challenges for solar developers.
“Site selection will become increasingly important as the focus shifts to resilience and risk management in the face of continued climate volatility,” he continued. “At the same time, renewable energy developers can expect increased pressure to secure equipment and interconnect positions to meet begun-construction deadlines needed to receive enhanced tax credits.”
The rush to secure tax credits ahead of deadlines imposed by the Trump administration has been a feature of the US solar sector in recent months. Earlier this year, experts at Crux told PV Tech Premium that the end of tax credit availability could push investors towards solar-plus-storage projects, which are a more attractive investment without the kind of tax credit support that was consistently available under the Biden administration. This uncertainty has introduced a degree of what Lehv calls “upward pressure” on PPA prices in North America.
“These developments illustrate how structural supply–demand imbalance is already exerting upward pressure on power and PPA pricing in certain regions,” he said.
PV Tech Premium will speak to kWh Analytics CEO Jason Kaminsky on trends in solar project insurance next week, as part of our ongoing coverage of the finances of the US energy transition.
After five editions of Large Scale Solar USA, the event becomes SolarPLUS USA to mirror where the market is heading. The 2026 edition, held in Dallas, Texas, on 24-25 March, will bring together developers, investors and utilities to discuss managing hybrid assets, multi-state pipelines, power demand increase from data centres and AI as well as the co-location of solar PV with energy storage in a complex grid. For more details and how to attend the event, visit the website here.
