North American solar power purchase agreement prices rose 3% during the second quarter to $53.68/MWh as the Biden administration ramped up measures to stem the influx of Asian solar components and panels hurting US manufacturers, LevelTen Energy Inc. said in its quarterly update.

"The added costs for projects utilizing duty-subjected components are folded into [power purchase agreement] prices — which may have contributed to this quarter's rising solar price trend," power purchase agreement (PPA) marketplace operator LevelTen wrote in its July 18 update.

In Europe, meanwhile both solar and wind PPA prices during the second quarter were at their lowest point in nearly two years, LevelTen said in a separate update.

The White House in May raised tariffs on Chinese solar component imports, starting this year, and ended the exclusion of bifacial modules from tariffs under Section 201 of the Trade Act of 1974 to protect the domestic solar industry from unfair Chinese trade practices.

The following week, the US Commerce Department announced separate investigations into the alleged illegal import of solar panels from China-backed companies based in four Southeast Asian nations.

Petitions filed by the American Alliance for Solar Manufacturing Trade Committee, whose members include US solar manufacturing leaders First Solar Inc. and Hanwha Q Cells USA Corp., asked Commerce's International Trade Commission to consider whether new antidumping and countervailing tariffs should be placed on imports of crystalline silicon photovoltaic cells from Cambodia, Malaysia, Thailand and Vietnam. Doing so would boost the effectiveness of incentives offered by the Inflation Reduction Act and other initiatives to increase solar manufacturing in the US, the group said.

"PPA counterparties are sharpening their pencils when it comes to import risk and developing strategies to mitigate potential disruptions and ensure equitable allocation of any associated challenges," LevelTen wrote in the report. "A growing number of buyers are becoming more comfortable paying a premium for PPAs from projects that use domestic content."

But higher tariffs on Chinese solar component imports have "little immediate impact" on the US industry compared to the potential results from the Commerce Department's investigation, according to S&P Global Commodity Insights Climate and Cleantech's Peter Gardett and Conway Irwin.

"If a large enough share of Southeast Asian imports were to be taxed at the [antidumping and countervailing duty] rate, the effect would still be to raise component prices to cost-prohibitive levels, choking off available supply and slowing US installation growth," Gardett and Irwin wrote in a May 30 report.

To qualify for the domestic content bonus, 40% of the cost of a product must be made in the US, so companies can still use strategic imported components like wafers and polysilicon. The domestic content requirement rises to 55% over time.

"The complexity of these supply chain calculations will add a layer of friction — and additional resource needs — to project planning," Gardett and Irwin continued.

A coalition of solar sector component manufacturers asked the Biden administration on July 15 to update the Inflation Reduction Act's domestic content bonus rules to include wafers, polysilicon and other important components.

Wind prices

Wind PPA prices increased by 7% during the second quarter to $65.85/MWh, which LevelTen attributed to "dwindling land availability" and rising insurance premiums for projects in natural disaster-prone electricity markets like the Southwest Power Pool and Midcontinent ISO. It was the third consecutive quarter of rising wind prices, according to LevelTen, with wind prices up 13.5% year over year.

"Nonetheless, demand for wind capacity remains high because of its generation shape, particularly among tech companies looking to power datacenters during nighttime hours," according to the report.

As the PPA marketplace responds to tech companies' skyrocketing power demand, parties are increasingly using indexing and "contractual 'offramps'" to insulate deals from major fluctuations, LevelTen said.