Independent power producers (IPPs) have, to date, largely relied on securing power purchase agreements (PPAs) with utilities for the price certainty needed to finance utility-scale solar projects.

Because the levelized cost of electricity (LCOE) of wind has recently been more competitive than that of solar, developers have had another path to price certainty, explained Lincoln Renewable Energy (LRE) COO and former Acciona (PINK:ACXIF) North America CEO Dan Foley.

LRE just announced the finalization of a twenty year PPA with Southern California Edison (NYSE:EIX) for the output of its adjacent twenty-megawatt Marathon and ten-megawatt Agincourt solar power plants, scheduled for 2013 construction in Southern California.

Foley said that soon, as the result of small marketplace changes, it could be possible to build utility-scale solar without a PPA.

“They always talk about plants being ‘built merchant’,” he said of some wind projects, “that they float with the market. Not all of them. Many projects were able to fix the price through derivatives. It looks merchant,” Foley said, “but it is a synthetic PPA.”

via Can Solar Follow Wind Into the Power Trading Market? : Greentech Media.