CALGARY, Alberta (March 26, 2025) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing a report on the surge in renewable power purchase agreements (PPAs) taking place since 2020.
Driven by tax incentives and growing demand from tech companies, PPAs have intensified market competition in a short amount of time. In the report, EIR acknowledges that developers must focus on competitive levelized cost of energy (LCOE) to secure PPAs, as pricing and contract terms increasingly depend on it. While typical PPA durations have been 20-25 years, shorter contracts have pushed the average to 17-19 years, requiring developers to adapt.
“The surge in renewable generation, fueled by tax incentives and the demand for clean energy, has made the market more competitive than ever. Developers now need to prioritize competitive LCOEs to secure PPAs in a tightening landscape,” said Corianna Mah, an analyst at Enverus.
“With PPA demand rising and more developers entering the market, the focus has shifted to ensuring competitive pricing. Developers who can offer the most cost-effective energy solutions will have the edge in securing long-term contracts,” Mah added.
“In 2024, most markets had enough solar projects to meet PPA demand at LCOEs in the $20-30/MWh range, as growing competition in the interconnection queues means that increasingly competitive project LCOEs are critical for securing PPAs.”
Key takeaways from the report:
- Since 2020, PPA demand has surged due to generous tax credits, corporate clean energy goals and increasing power needs. The largest hyperscalers have signed almost 5 GW of PPAs in the last five years. This trend will continue with growing data center demand and as more corporations transition to 24/7 clean energy matching.
- Rapid growth of renewables has created a buyers’ market, exerting downward pressure on contract durations. A growing number of PPAs last only 10-15 years, shorter than the lifespan of most assets.
- By analyzing cumulative capacity during the interconnection agreement stage by LCOE and intersecting capacity additions in 2024 with queued project LCOEs, we estimate solar PPA floor values range from $20-$30/MWh in most markets. NYISO stands out as somewhat higher due to lower capacity factors.
EIR’s analysis pulls from a variety of Enverus products including Enverus Foundations® | Power & Renewables.
You must be an Enverus Intelligence® subscriber to access this report.
About Enverus Intelligence® Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
