Utility Dive•about 1 month ago
Tariffs drove construction input prices up to start 2026
Key Takeaway
Rising material costs, driven by tariffs, will significantly increase the capital expenditure for power projects and large consumer infrastructure, leading to higher PPA prices and project development challenges.
AI Summary
- •Nonresidential construction input prices rose at a 'blistering' annualized rate of 7.1% in January 2026.
- •Key material costs saw dramatic year-over-year increases: Copper up 80%, Iron and Steel up 58%, and Switchgear up 67%.
- •These cost escalations, attributed to tariffs, will significantly increase CAPEX for new power generation, transmission infrastructure, and large industrial/datacenter facility construction.
- •Developers will face higher project costs, impacting the economics of new builds and likely leading to increased PPA prices for large power consumers.
Topics
ccgtdatacenterfinancingoempolicyppasimple-cyclesolarstoragetransmissionwind
Article Content
January’s cost increases amounted to a “blistering” annualized rate of 7.1% for nonresidential input prices, according to Associated Builders and Contractors. Copper was up 80% year over year, iron and steel 58% and switchgear 67%.