Post-OBBBA market examined in survey
The pipeline of safe-harboured projects remains strong through the end of 2028, the volume of hybrid projects with storage is poised to surpass standalone wind and solar, and the signing of power purchase agreements remains robust, according to a survey from LevelTen Energy which examined renewables trends following passage of the One Big Beautiful Bill Act.
Clean energy marketplace operator LevelTen polled 29 US clean energy developers for its US Clean Energy Development Pipeline Report. It determined those developers have project pipelines totalling over 233GW of planned capacity. Of the wind and solar projects that are slated to achieve their commercial operation dates by the end of 2028, more than three-quarters, or roughly 33GW, are reported as having been safe-harboured.
"However, safe-harboured capacity begins to drop off fast after 2028, with very little safe-harboured capacity for projects that achieve COD in 2030 and beyond," the report found. "The post-OBBBA rush to begin construction on as many projects as possible before July 4 2026 has necessitated a focus from developers on projects that are more mature and provide clearer line-of-sight to key construction milestones."
Of the participating developers' total planned pipeline, standalone storage and hybrid development surpass standalone wind and solar pipelines by 2030 and beyond that hybrid development plans exceed all other technologies "by a substantial margin". Improved tax credit conditions post-OBBBA for hybrid assets compared to standalone solar and wind are likely contributing to the trend, the report noted. "Since storage's ability to secure federal tax credits has remained largely unchanged, adding BESS to wind or solar provides a more certain source of tax credits for the project; buoying financing conditions," the report states.
PPA counterparties are continuing to work to get deals done, with a large majority of surveyed developers reporting an increase in buyer demand post-OBBBA, the report said. "To traverse the uncertainty of the present moment, counterparties are increasingly using price adjusters, indexation, conditions precedent, and other contractual tools to mitigate risks and provide future flexibility for their deals."
Price adjusters enable a PPA price to be revisited after deal signing if predetermined thresholds are breached or certain events unfold. These events could include regulatory changes, tax credit policy shifts, tariffs on project components, or interconnection costs, for example, LevelTen said.
"Price adjusters can also be indexed to commodity prices, labour costs, tax credit availability, or other elements of PPA price that counterparties may be particularly uncertain or concerned about, with the granularity of price variation also predetermined," LevelTen said in a separate report focused solely on PPAs.
“Typically, counterparties insert price adjusters to account for events that are viewed as too challenging to reasonably foresee, and therefore too difficult to adequately address at the time of initial deal signing,” the report explains. In an example provided in the report, if tariffs come into effect after a PPA is signed that increase the price of solar panels by 25%, and panels represent 30% of total project capex, tariffs would increase the overall project cost by 7.5%.
"Assuming that the counterparties believe neither group should bear this cost increase in its entirety, they could pre-define the cost increase such a tariff would create, and how much the PPA price should adjust as a result. In this example, if they chose to split the difference, such a tariff would result in the PPA price being adjusted upward by 3.75%," LevelTen explains. Reaching agreement on the specifics often requires the involvement of a third party, like an engineering or procurement specialist.
Change of law provisions have long been a standard feature in PPAs but have become more common in recent months, LevelTen said. They could apply to new tariffs, changes to tax credits, or trade laws including Foreign Entity of Concern rules. In one example if a developer was concerned about a potential change in tax credit availability, they could add a clause specifically naming these concerns to allow for contract renegotiation if policy changes occur.
“If these concerns centered specifically around potential financial impacts, this contractual language could permit price renegotiation discussions or allow for the termination of the agreement with minimal, or potentially no, financial penalty,” the report noted.
A third type of clause that deals with uncertainty is conditions precedent, which can be included in PPA offers by sellers, enabling adjustment or in some cases termination of a PPA in scenarios deemed to be beyond the reasonable control of developers. LevelTen said approximately one-third of sellers' PPA offers include at least one CP.
“As buyers continue to grow more aware and understanding of the significant risks and uncertainties developers face in bringing projects to operation, tolerance of CPs has grown,” the report found. CPs commonly include specifications related to finance and approvals or securing additional offtake.
Financial and approval CPs typically outline a specific timeframe during which buyers must wait while a selling party secures approvals, in some cases extending for as long as a year. Other CPs include those related to securing interconnection agreements or navigating complex permitting as well as general development CPs that address project-specific hurdles.
Forthcoming FEOC rules are poised to add more uncertainty and compliance costs for developers, the report noted, and ambiguities remain on the start of construction guidelines post OBBBA.
"For example, debate is ongoing around the extent to which developers can reallocate tax-credit-qualified components from one project to another, both within a firm's own pipeline, and in an acquisition scenario that would see the components transferred to another entity."
