01The Setup
The corporate PPA market grew from a curiosity in 2015 to a meaningful demand pull in 2020 to the dominant new-build demand driver by 2024. Hyperscalers — Google, Microsoft, Amazon, Meta — are now the largest single category of PPA offtakers. Add the consumer brands with RE100 commitments, manufacturers chasing scope-2 reductions, and finance/insurance/tech firms with net-zero targets, and the demand side has scaled rapidly.
The supply side hasn't. Developer pipelines are constrained by: interconnection queue waits (5-7 years in some ISOs), equipment costs (panels, inverters, transformers), tariff and policy uncertainty (changing every 18 months), and capital costs (higher interest rates affecting project finance economics). Annual new-build solar+wind capacity additions have grown, but not at the pace demand has grown.
02The Data
- 2025 contracted capacity: ~28 GW
- YoY growth: +30%
- Solar PPA (2021-22): $25–30/MWh
- Solar PPA (2025-26): $40–55/MWh
- Wind PPA (2025-26): $45–60/MWh
- Interconnection queue: ~2,500 GW national
- MOU-to-COD survival: ~20–25%
The competitive PPA market that delivered solar PPAs at $25-30/MWh in 2021-22 is delivering them at $40-55/MWh in 2025-26. Wind PPAs run higher still. Long-duration, hourly-matched, additionality-rich structures price at premium to those ranges.
Developer pipeline survival rates are the underappreciated number. Roughly 30% of signed MOUs reach financial close; of those, roughly 70-80% reach commercial operation date. The pipeline-to-COD attrition means buyers signing contracts today face real delivery risk on top of pricing risk.
Tariff and policy uncertainty (as of Q1 2026) continues to delay project FIDs. Even the projects that close financing are taking longer to start construction.
03The Implication
Net-zero roadmaps developed in 2022-23 under assumptions of cheap, abundant clean energy procurement need recalibration. Customers who signed strategic commitments based on $30/MWh PPA assumptions are facing a market where credible procurement costs 50-80% more — and where availability is less certain than the underlying assumptions suggested.
Sustainability advisors managing client roadmaps face a credibility decision: re-baseline now with clients (uncomfortable conversation, but defensible), or wait until the contracts that were supposed to be signed in 2025-26 don't get signed (worse conversation, less defensible).
04The Recommendation
- For corporates with net-zero commitments. Re-baseline assumptions. Build the case to the C-suite that the cost of credible procurement is materially higher than the 2022-23 planning numbers, and that the strategic value of locking in current pricing rather than waiting is compounding. Lengthen procurement timelines — the 2027-2030 window may price higher still.
- For sustainability advisors. Treat this as a 'told you' moment with grace. Revisit roadmaps you advised on under earlier assumptions, present updated numbers, manage the conversation about what changes vs. what stays. Clients respect advisors who update views with new information; they distrust advisors who pretend the original plan still holds.
- For procurement teams. Consider a portfolio approach: a mix of direct PPA (for additionality and brand credibility), unbundled RECs (for compliance flexibility), and hourly-matched products (for forward-looking methodology). Single-instrument strategies are riskier in a market this dynamic.
- For boards. This is the moment to have the conversation about what net-zero credibility costs vs. what the company has budgeted for it. The gap between assumption and reality has widened. Either the budget updates or the commitment narrows.
The corporate PPA market has matured into something that looks more like commodity procurement than ESG strategy. Prices clear at supply-demand balance, not at strategic preference. The companies treating it as the former are getting better outcomes than the companies treating it as the latter.