Solar auctions to provide security in France as corporate PPAs remain second choice

Experts from the trade body told PV Tech Premium that a “complementary” relationship between the two mechanisms would be to the benefit of European renewables as a whole, and Dray says that the French regulator CRE (Commission de régulation de l’énergie) has taken steps to remove uncertainty in French solar financing.

“CRE wanted to better regulate it to give it more stability and visibility for the renewable players there,” Dray explains. “They did revise the targets [for renewable energy deployment], and they’re a bit lower now, and all this creates uncertainty in terms of developers.”

These targets were lowered in February this year, with the launch of the third iteration of the French Programmation Pluriannuels d’Energie (PPE3). While PPE2 aimed to have 100GW of operational capacity in place by 2035, PPE3 first aimed for a maximum of 90GW by this date, and this target was reduced further to 55-81GW in February in the final iteration of PPE3. Dray notes, however, that PPE3 has also finalised the date for the next round of French clean energy auctions, to be held in July, and is hopeful that this will introduce a degree of certainty to the investment landscape.

Auctions to provide security for developers

“Many players are waiting for this auction, especially for the auction result, to move with their development pipelines,” Dray explains. “It’s always oversubscribed—each time they grant 900-950MW but it’s always oversubscribed—so there is a will there.”

Dray adds that it is important to capitalise on this desire to build new solar capacity in France, as otherwise, French developers may simply relocate to other countries with more attractive auction options.

“What I see, personally, is French developers, those who can and those who are not very small, try to diversify, and they go and start developing in other countries,” she says. “I see several French companies in Italy now, looking to form joint ventures … some of them looking at Poland and Romania.

“From the other side, all of this uncertainty has had an influence on companies that are going through business restructure if they are only France focused, with this uncertainty you’re not able to guarantee your future revenue anymore.”

This is notable, considering the value that robust government auctions have had in the energy mixes of these other European countries. In recent weeks, PV Tech Premium has heard from R.Power about how the legacy of auction support in Germany has been “very important” in making investment decisions in the country, and from Sonnedix about how both solar and storage auctions in Italy have become “crucial” parts of the investment landscape.

As a result, Dray says July’s auctions in France carry “a lot of hope” for investors and would-be developers. This auction will offer 925MW of ground-mounted PV, alongside what Dray calls a “simplified” auction for small-scale solar, and will be the first solar-specific auction to be offered in France.

“In the latest months we’ve seen the industry [have] low morale [and ask]: ‘Where are we going?’ ‘What’s the future?’ because contracts for difference (CfDs) were not very clear until they published something,” Dray says. “It’s more about the future, because if they reduce the targets … you’re killing a lot of gigawatts there in the pipeline.”

Tackling negative hours with storage

“French utility-scale solar still relies heavily on auction-backed CfD-style support, which remains the most bankable route to market,” says Dray, highlighting the importance of auctions in making projects bankable. This is particularly important in France because, as she explains, France suffers from “a lot” of negative pricing hours.

“France also suffers from a lot of negative hours,” she says. “Less than Germany or Spain, but there are still negative hours (RTE recorded 513 negative-price hours in 2025, up from 352 in 2024). [This] market is facing growing midday price depression and lower solar capture values.”

She adds that “there is a will to regulate new capacity added” as capture rates have fallen considerably in recent years, from 97% in 2022 to 60% last year. Battery energy storage systems (BESS) are one obvious tool to tackle this issue, but, unlike Italy, which is planning to offer auctions for co-located solar and storage projects in its upcoming FER Z auction, there is no such government support for storage in France.

Dray argues that this could be an area where the French auction needs to change in the future, as the demands of the energy transition move away from simply deploying as much capacity as possible to delivering a robust and adaptable energy system.

“It’s more looking at the future additions of power to the grid in terms of flexibility [and] in terms of what the network is going to look like, and not just bringing more and more volumes of cheap energy online,” she says. “Policy is increasingly steering projects toward PV-plus-storage, especially because CRE has proposed changes to large-scale PV support rules to better reflect negative-price risk and encourage co-located storage.

“It’s inevitable, integrating storage. Maybe this is what’s going to help the auctions, because if we’re thinking more about future solar deployment, and building a more useful solar rather than just deploying megawatts, [for] the power system itself, it will be easier to reconduct, each time, the auctions.”

PPAs are ‘complementary rather than dominant’ in France

The combination of auctions providing greater investment certainty and France potentially taking inspiration from Italy’s solar-plus-storage auction could imply that auctions and CfDs are the only way to secure finance for solar PV in France.

Indeed, Dray notes that there has been a general cooling in PPA appetite in France too, which is in line with similar trends across Europe. This week, LevelTen’s latest report into European PPA prices found that the average price of a solar PPA signed in Europe fell 4% between the fourth quarter of 2025 and the first quarter of 2026 to €55.05/MWh (US$64.83/MWh), and Dray says this is prompting a question from would-be market entrants: “Why should I sign for 10-15 years if the prices are so low?”

However, Dray argues that while auctions are the first choice for many developers, there is still space for corporate PPAs as a financing mechanism, particularly as CfD and PPA prices are “without a big difference” in France at present.

“In France, we had €74.13/MWh for the last CfD average awarded price for ground-mounted PV—so between €70-80/MWh—and PPAs are around that range, without a big difference,” she says, suggesting that this is true beyond France too. “In Germany, for example, the CfD is €40-50/MWh for solar, while PPAs are slightly higher, around €45-55/MWh.

“The state-backed auction/CfD route remains the most standard bankable path, while PPAs are complementary rather than dominant,” she explains. “CRE’s PPA observatory supports the point that PPAs are still a developing route to market in France.”

“It’s still there; it’s another vehicle to make a project bankable if you didn’t get the CfD auction, and if you need external financing you’ll go for a PPA, but the volumes became less. But that’s a general tendency in Europe.”