Price inversions are also generally rare and location specific, pumped storage wants to operate every day and can’t wait for unusual events thus increasing their average prices. Further as you increase storage you change the local market reducing price swings. More to the point a company that’s building both generation and storage for say an island needs to build extra production to be guaranteed to fill up that storage. It’s only useful with surplus generation and guaranteed surplus is not free.
As to solar production prices that’s completely independent of wholesale prices. These deals involve low prices specifically because of the intermittent nature of solar power and it’s close correlation with other solar production. The fear for these operators is the wholesale market changing over the next 20 years with ever more and ever cheaper solar not how the current market operates.
Nothing I wrote was specific to a single kind of storage resource.
I haven't been involved with any of these solar IPPs or seen the terms of the PPAs, but while I think your characterization of the PPAs is mostly right, I don't think it's accurate to say that they're “completely independent of wholesale prices”. You've addressed the reasons for the IPP to seek a PPA, but those same reasons are disincentives for the counterparty. The buyer is specifically betting on the PPA price being lower than the LMPs over the life of the PPA, or at least not too much higher. That's why some of these PPAs include storage—it reduces the buyer's risk.
Also, BTW, negative LMPs are a different phenomenon from price inversions. Not sure if you're confused about the phenomenon or just the terminology. Negative LMPs are not rare; they happen nearly every night in some markets.
Thank you for exploring these questions with me!
Areas with significant elevation drops conducive for pumped storage also tend to have a lot of hydro which is generally very dispatchable. The Great Plains have a lot of wind and are in significant need for energy storage, but they don’t see a lot of elevation drops.
Thus negative LMPs being rare for pumped storage.