Flood of US Renewable Projects Risks ‘Breaking’ Power Markets
A solar farm in San Bernardino County, California.
Photographer: Bing Guan/BloombergThis article is for subscribers only.
The potential for a flood of US renewable projects driven by new tax incentives is at risk of “breaking” power markets by pushing electricity prices to negative levels, according to Wells Fargo.
When building wind and solar farms, which can run for 20 or 30 years, becomes more of a tax play than about generating cash, electricity prices can fall to zero or lower, Alok Garg, head of renewables and asset finance at Wells Fargo, said at the Acore Finance Forum in New York on Wednesday. The potential for revenue is falling for the renewable industry just as government incentives are getting bigger, he said.