Nichola and Isla Groom

(Reuters.) – The prices for solar energy in the major markets has climbed almost 30% since last year. Developers have had to contend with unpredictable supply chains and rising costs for all things, including shipping and labor.

According to LevelTen Energy’s quarterly index, contract prices for renewables rose 28.5% in North America, and 27.5% across Europe, in the past year. The deals are known as power purchase agreements or PPAs in this industry.

LevelTen reported that prices increased 9.7% in North America, and 8.6% in Europe in the first quarter.

The coronavirus pandemic has caused severe disruptions in the economy, logistics, and labor markets. This is despite a decade-long trend of rising costs for renewable energy.

The risk of higher prices could limit demand growth when there is an urgent need for clean energy expansion to avoid any adverse effects from a warmer climate.

Rob Collier said, in an interview, that the “foot on the gas” is still necessary at LevelTen’s energy marketplace.

The sector faces serious challenges in North America and it is not clear if the U.S. will offer tax reliefs for renewable energy plants as part of President Joe Biden’s climate change agenda. The U.S. Commerce Department’s investigation into solar panel imports from Asia has raised concerns among developers.

Reagan Farr (chief executive at Silicon Ranch in the U.S.), stated in an interview that “there’s just intractable issues right now with our supply chains.”

The war in Ukraine led European governments to seek to decrease their dependence on Russia. This has further increased the demand for renewable energy.

Oscar Perez, partner in Q-Energy and a Spanish-based fund manager, stated that war had been “the final straw for a marketplace where there was already lots of price tension.”

Graham, Raymond James analyst (NYSE: Price) says that Europe’s rising costs of renewables should make it more attractive to invest in higher-end technologies, such as biofuels and green hydrogen.

LevelTen stated that soaring prices are not slowing down demand at the moment. The report reveals that 75% of the 21 sustainability and energetic advisers polled by LevelTen said their clients have either accelerated, or maintained, procurement plans.

Luigi Sacco from Milan’s Falck Renewables head of PPA Origination said that “it isn’t about demand.” The demand is strong, but the supply is a little weak in some markets.

The rising cost of fossil fuels is one factor that lures buyers towards renewables.

Farr stated that gas is the best alternative to renewable energy right now, with gas prices up 100 percent. You can choose your poison.