The average price of a solar power purchase agreement (PPA) in Europe in the third quarter of 2025 fell to €34.25/MWh (US$40.05).
This is according to the latest report from analyst LevelTen Energy, and reflects a decline of 3% between the second and third quarters of this year. Average European solar PPA prices have now fallen 19.4% compared with the third quarter of 2024.
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Average solar PPA prices remain lower than those for other technologies—the average wind PPA price sat at €52.75/MWh in the third quarter, a 1.4% quarter-on-quarter increase, while blended PPA prices fell 1$% to €35.55—and fell at a faster rate over the last 12 months than either wind or hybrid deals.
LevelTen concludes that “the increase in solar price cannibalisation” in several European countries is decreasing the perceived value of standalone solar assets, while making investors more likely to support projects co-located with battery energy storage systems (BESS).
Andrés Acosta, director of innovation in Europe at LevelTen, told PV Tech as much last quarter, when the same trend emerged. In its third quarter report, the company notes that there has been a “surge” in hybrid PPA deals in Europe, combining both solar and wind with BESS, suggesting that investors are more interested in the presence of storage components, rather than the type of renewable electricity generation, when making investment decisions.
Iberian blackout and data centre demands drive changes
The report also highlights considerable regional and national variety across the European solar PPA space, with the average cost of a solar PPA signed in the third quarter ranging from €120.00/MWh in Ireland to €33.46/MWh in Portugal.
The average price of a solar PPA signed in Portugal fell -€2.16/MWh between the second and third quarters of this year—equivalent to a 6.1% decline—surpassing Spain, which had the cheapest solar PPAs in Europe last quarter.
Both countries have seen among the greatest percentage changes in average solar PPA price over the last 12 months. Between the third quarter of 2024 and the third quarter of 2025, the average solar PPA price signed in Spain fell 14.1%, while the average price in Portugal fell 16.3%, the third- and fourth-highest rates of decline across Europe, respectively. This reflects growing uncertainty in both markets following the blackout that rocked both countries’ grids in April this year, for which over-voltage has been pinpointed as the primary cause.
The graph above shows average solar PPA prices and quarter-on-quarter changes for 11 European countries. The LevelTen report notes that, while several countries have seen quarter-on-quarter and even year-on-year price declines, the growth of data centres in a number of European countries has helped drive up demand and prices for clean power.
The report points to Ireland, which has the highest solar PPA prices in Europe, and Finland, which saw the largest month-on-month percentage growth in solar PPA prices at 10%, as two countries where this trend is particularly pronounced. The report said both nations had received “significant investments” into data centres, driving up PPA prices.
The general decline in European solar PPA prices contrasts sharply with price increases in North America, which showed a 4% quarter-on-quarter increase in solar PPA prices. LevelTen attributed this increase to growing uncertainty and “policy headwinds” in the US renewable energy space in particular, highlighting the importance of policy in driving market confidence.
