LevelTen Energy says solar and wind power purchase agreement (PPA) prices in Europe continued to decline in the fourth quarter of 2025, with the most competitive percentiles in Spain below €30 ($35.65)/MWh, reflecting strong downward pressure.
The European solar PPA market continues to see contract prices fall, according to a new report from LevelTen Energy.
Q4 2025 confirms the downward trend in solar PPAs, with a further quarterly decline of 1% in the LevelTen continental index and a year-on-year decline of almost 8% in the P25. The imbalance between the rapid expansion of renewable supply and slower-growing electricity demand, along with the proliferation of negative prices, is reducing the market value of pure solar generation in several countries.
Greece and Germany saw the largest quarterly declines of 4.5% and 4.3% respectively, from €54.0/MWh to €52.50/MWh and from €52.0/MWh to 49.77/MWh, followed by Italy (-3.7% to €60.67/MWh), Spain (-3.0% to €32.50/MWh) and France (-0.4% to €60.67/MWh). €63.40/MWh).
Denmark and the United Kingdom, on the other hand, saw an increase of 3.7% to €48.78/MWh and 1.7% to €87.36/MWh respectively.
Wind power PPA prices also fell last quarter (-3%), although the technology still offers a more stable production profile and higher capacity factors. This makes it an attractive addition to companies’ purchasing strategies, especially in electricity-intensive sectors such as data centers. Markets in Germany, Italy and the Scandinavian countries reinforce this trend.
Structurally, the European Commission has driven this transition through its ‘Grids Package’, which aims to modernize networks, accelerate reinforcement and storage projects and prioritize more mature projects in the connection queue. This reduces the impact of speculative initiatives and recognizes that mass integration of renewable energy requires not only greater network capacity, but also greater systemic flexibility.
“Europe’s energy system is in a period of transition, as rapid growth in storage and development of hybrid projects pushes the continent into the next chapter of decarbonization. As the energy pipeline becomes more hybridized, the PPA market and corporate offtake needs will also increase,” LevelTen said. “Yet the hybrid PPA space is still in its infancy, with standardized approaches for signing such contracts sorely lacking.”
This content is copyrighted and may not be reused. If you would like to collaborate with us and reuse some of our content, please contact: editors@pv-magazine.com.
