Texas two-step: Dissipating solar margins in ERCOT

Despite market clearing prices this summer that were on average as much as twice as high as any summer period over the last five years, solar margins this year have still only returned premiums about half what they had been at their highest points during this period. Delayed load growth out of the pandemic and gas price volatility helped to hide this trend the last few years. With scarcity value and pricing significantly diminished for solar projects, investment will continue, but with tighter margins, different deal structures and more risk taking.