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Off-Site Physical PPA

Understand Your Market

There are three critical dimensions to understanding your market in relation to a potential PPA: renewable resource availability, market pricing, and your local grid profile—the latter is important for understanding the environmental attributes of your grid’s electricity, such as greenhouse gases (GHGs) and pollutants.

To better understand your market, you may want to research:

  • Wind and Solar Resources

    The location of a wind or solar farm will have a significant impact on both the expected output and PPA price. Typical wind or solar resources can vary significantly across geographies—even between two locations in the same state. NREL’s Resource Maps provide summaries of the available wind, solar, and other resources available in the United States.

  • PPA Prices

    To generate an initial understanding of current PPA prices in different US wholesale markets, see LevelTen’s price index. LevelTen collects data on projects and pricing from a variety of developers and periodically shares it in an aggregated format. Lawrence Berkley National Laboratory’s annual wind and solar reports provide historical data on PPA pricing and trends in different parts of the United States.

  • Electricity Market Prices

    PPA prices need to be compared to the current price your city pays for electricity in order to evaluate the potential profitability or cost of a PPA. If your city currently purchases electricity at a set rate from a utility or retail electricity provider, you should consult your bill to identify how much you pay per kilowatt-hour (kWh) or MWh. If your city already buys energy from a wholesale market, you should first clarify which wholesale market your city sits within; this map should help address this question. You can download historical wholesale electricity prices here (for most markets); here for PJM; or here for the Southwest Power Pool.

  • Greenhouse Gas Impact in Your Market

    Renewable energy production reduces greenhouse gas emissions if it displaces fossil-fueled energy production which would otherwise have been needed to meet electricity demand. The EPA’s eGrid data provides information on average emissions per MWh in your local electricity market. While these data include state-level emissions, we recommend using your eGrid subregion rather than state-level data, as subregion boundaries are more meaningful with respect to grid operations. If you’re interested in a more nuanced and accurate assessment of the potential GHG impacts of a project, you may wish to consider working with a group like WattTime.