Solar Power Purchase Agreement Prices Rise in Q3 2026
The average cost of solar power purchase agreements climbed to $64.23 per megawatt-hour during the third quarter.
Updated on Oct. 21, 2026 in Utilities
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Average solar power purchase agreement prices rose 4.9% in the third quarter of 2026, reaching $64.23/MWh. This marks a 6% increase year-over-year and a 12.7% rise since the third quarter of 2024.
Why it matters
Rising costs are driven by increased equipment pricing for solar modules following the announcement of Section 232 tariffs. These tariffs are projected to add an additional $3/MWh to $7/MWh to costs once they take effect.
Solar power purchase agreement prices increased 6% year-over-year, while wind energy prices rose 13.8% over the same period. More than half of all solar modules have now been repriced as developers navigate new market conditions.
The details
Buyers are rushing to sign contracts to lock in prices before Section 232 tariffs impact the market, leading developers to focus on expanding existing sites rather than new projects. Meanwhile, the market for new-build power purchase agreements is increasingly dominated by hyperscalers, who accounted for 99% of contracts in the first quarter of 2026.
Timeline
2016: The number of first-time power purchase agreement buyers reached a record low.
Q3 2024: This period serves as the baseline for comparative price increases.
Q1 2026: Hyperscalers secured 99% of new-build power purchase agreements.
Early August 2026: Section 232 tariffs were formally announced.
Q3 2026: The average solar power purchase agreement price reached $64.23/MWh.
Market Landscape
The introduction of Section 232 tariffs has fundamentally altered the competitive landscape for renewable energy procurement. This shift forces developers to pivot from new project pipelines toward site repowering to mitigate rising equipment costs.
Rising prices for renewable energy contracts may eventually influence commercial electricity rates as businesses pass these costs down the supply chain. Smaller buyers may face increased difficulty securing affordable energy as hyperscalers continue to dominate the new-build contract market.
The takeaway
Market participants should anticipate continued price volatility as developers navigate supply chain constraints and trade policies. Businesses looking to secure long-term renewable energy should account for these rising costs in their procurement strategies.
Further reading
For broader trends in the energy sector, explore more on Utilities.
Source note: This article includes information reported by Utility Dive.
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