Race to resiliency: Tax-credit phaseout expected to push renewable PPA prices higher

CALGARY, Alberta (July 29, 2026) - Enverus Intelligence® Research (EIR), a subsidiary of Enverus, is releasing a new report examining how the accelerated phaseout of federal clean electricity tax credits could affect renewable project economics and power purchase agreement pricing.

EIR screened 3,236 U.S. wind and solar projects with disclosed first-power dates before Dec. 31, 2027, and identified 759 projects, including 680 solar and 79 onshore wind projects, as dependent on IRA tax credits. For these projects, levelized energy costs exceed projected technology-weighted merchant power prices plus renewable energy certificate revenue once tax credits are removed.

The report concludes that projects failing to preserve tax-credit eligibility will need stronger PPA pricing to support their economics. The effect will vary by buyer. Hyperscalers with firm clean-energy commitments may be more willing to pay a premium for renewable power, while other offtakers may have less flexibility, particularly where higher contract prices ultimately flow through to retail customers at the meter. The report does not quantify the expected increase in PPA pricing.

Projects covered by the analysis must have started construction by July 4, 2026, or reach commercial operation by Dec. 31, 2027, to preserve eligibility under the report's assumptions. Interconnection timing adds execution risk, especially for projects in earlier development stages and in markets with historically long connection timelines.

"As federal tax credits phase out, renewable projects that cannot preserve eligibility will need stronger PPA pricing to support their economics. Hyperscalers with firm clean-energy commitments may be more willing to absorb that premium, while other offtakers could face greater difficulty, particularly where higher contract costs ultimately reach consumers," said report author and EIR analyst Brynna Foley.

Key takeaways:

• EIR identified 759 planned wind and solar projects whose before-tax energy costs exceed projected merchant power and REC revenue without tax credits.
• The at-risk group includes 680 solar projects and 79 onshore wind projects from a screening set of 3,236 projects with disclosed first-power dates before Dec. 31, 2027.
• Projects that fail to preserve tax-credit eligibility will require stronger PPA pricing to maintain their economics, although the report does not estimate the size of the increase.
• Hyperscalers with firm clean-energy targets may have greater capacity to accept higher renewable contract prices than other buyers.
• In markets where contract costs pass through to retail customers, offtakers may have less flexibility to absorb higher prices.

Figure 1A | At-Risk Solar Projects by Interconnection Phase

EIR's analysis pulls from a variety of products including Enverus ONE.

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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.