Merchant economics now clear in three markets

It also changes the financing. Merchant projects can be underwritten on market revenue curves, which brings in a different and much larger pool of capital than subsidy-dependent projects can access. Merchant clearing means the project earns its return from market revenue without a support mechanism. Once that threshold is crossed the buyer set widens from programme-driven developers to anyone with a balance sheet and a grid position. The caveat is that clearing at current spreads is not the same as clearing through a cycle. Spreads compress as storage penetration rises, and the projects being underwritten today are being underwritten on today's spreads.