A recent report by LevelTen Energy on Europe’s renewable power purchase agreement (PPA) market for Q1 2025 reveals key dynamics indicating overall stability, yet nuanced differences and unique trends across countries, energy sources, and hybrid PPA sectors.
The report shows that the average value of solar PPAs signed in Europe during Q1 2025 rose just 1.3% quarter-on-quarter, reflecting market stability in solar power procurement. In terms of pricing, the average solar PPA price in Europe increased by only €0.79/MWh (or $0.88/MWh) from Q4 2024 to Q1 2025, reaching €63.11/MWh.
The wind energy sector demonstrated similar stability, with the average PPA price rising by just 0.9% quarter-on-quarter. LevelTen Energy noted that this pricing stability sends a positive signal to investors.
This stability was further reinforced in major European markets. In Spain, the average solar PPA price fell by 5.1% quarter-on-quarter, while in France, it rose by 6.3%. Over a longer period, compared to Q1 2024, Spain’s PPA prices declined by 3.9%, whereas France’s increased by 6.9%, underscoring the relative stability of PPAs in these key markets even over extended timelines.
However, not all countries exhibited such steady pricing trends. Price variations were more pronounced elsewhere. Denmark and Bulgaria reported the largest quarterly increases in solar PPA prices, at 26.1% and 13.5%, respectively.
On the price decline front, Sweden, Poland, and Germany saw significant drops in average solar PPA prices signed last year. From Q1 2024 to Q1 2025, transaction prices in these countries fell by 20.8%, 17.7%, and 15.2%, respectively. The decline in Germany’s solar prices is partly attributed to the Bundesnetzagentur’s reduction of the price cap for this year’s PV tenders. Lower tender prices and consistent oversubscription indicate growing solar adoption in Germany. However, Plácido Ostos, LevelTen’s Director of Analysis for Europe, suggested that these price drops are likely limited, noting that “there is a floor” before transactions become unfeasible.
Beyond single-energy PPAs, the hybrid PPA market (combining multiple renewable technologies) also merits attention. Prices remained stable, with the average European hybrid PPA price rising by only 1.1% from Q4 2024 to Q1 2025. Compared to the same period last year, this price fell by 5.4%, though the larger decline does not necessarily indicate instability or investment risk. Given the growing popularity of hybrid PPA transactions, particularly those paired with energy storage solutions, this is a positive development. At Intersolar Europe, Itamar Orlandi, Director of Business Strategy at Swiss consultancy Pexapark, emphasized the risks of investing in single renewable technologies, noting that hybrid deals have become a vital tool for mitigating such risks. He also mentioned that independent power producers are simultaneously shifting toward wind or hydro projects to diversify the risks of solar projects entering the market.
