Average prices for solar power purchase agreements (PPAs) in Europe rose 0.4% between the second and third quarters of 2026, according to the latest data from LevelTen Energy. In the United States, prices increased by 4.9%.
LevelTen attributes the European increase to macroeconomic factors, including higher photovoltaic module prices and interest rates. Rising costs are increasing project development expenses and pushing PPA prices slightly higher to maintain project financial viability.
The consultancy has also changed how it presents its data. Rather than reporting prices directly in euros per megawatt-hour, it now uses an index based on prices eight quarters earlier, assigning the reference period a value of 1.00.
Under this methodology, the European solar PPA price index stood at 0.86 in the third quarter of 2026, equivalent to 86% of the price recorded in the third quarter of 2024, when the average reached €63.64/MWh. The wind PPA index stood at 0.99, indicating a much smaller decline over the same two-year period.
The quarterly increase therefore does not offset the cumulative fall in solar PPA prices since 2024. Instead, the data point to recent stabilization following a more pronounced period of decline.
Contracts combining renewable generation with battery energy storage systems (BESS) are gaining traction across Europe. LevelTen reported hybrid PPAs in nine European markets during the third quarter, with Spain and Portugal accounting for almost half of the hybrid contracts recorded across the region.
In Spain, the average price for standalone solar PPAs fell to €30.93/MWh, down 1.2% from the second quarter and 7.7% year on year. LevelTen considers prices to be approaching the lower limit at which projects can still secure financing.
Spanish hybrid PPAs, by contrast, reached an average of €48/MWh. The difference reflects the additional value storage can provide by shifting some generation to other hours, reducing exposure to periods of low electricity prices and limiting the economic impact of renewable energy curtailment.
Hybrid PPA prices did not move uniformly across Europe. In Spain, they rose 6.8% quarter on quarter, while in Germany they fell 12.7%. Adding storage does not, by itself, eliminate PPA price volatility; outcomes depend on the conditions in each market.
In Spain, growing renewable energy curtailment is an important factor. Curtailment reached 2.5 TWh in the first half of 2026, more than three times the volume recorded in the same period of 2025 and 50% above the total for all of 2024.
Against this backdrop, integrating BESS into renewable energy projects and their PPAs is emerging as one way to make generation more flexible and reduce exposure to periods of surplus supply.
For the first time, LevelTen’s report includes data on PPAs linked to operating assets, alongside contracts associated with new projects. Agreements involving operational installations currently account for about 40% of transactions recorded on the platform.
The trend is also reflected in offers, with PPAs linked to operating assets rising from less than 10% of the total to nearly 40% in the third quarter of 2026.
Operating assets carry less development risk because they avoid many of the uncertainties associated with permitting, construction and commissioning delays.
They can also offer buyers a faster route to adding renewable electricity to their portfolios. This may appeal particularly to buyers that prioritize energy availability and price over additionality — the contribution a new project makes to increasing renewable energy supply.
European PPA markets are therefore moving from a period of steep price declines toward one shaped by higher development costs, pressure on standalone projects and greater integration of storage. In Spain, where solar PPA prices are among Europe’s lowest and renewable energy curtailment is increasing, hybridization with BESS is playing a growing role in the economics of new projects.
From pv magazine España
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