Solar prices fall in Spain

The average prices for solar power purchase agreements (PPA) without storage in Spain have dropped by 7.7% compared to the same period last year, reaching 30.93 € per megawatt-hour (MWh) in the third quarter of 2026.

Battery storage boosts hybrid contracts

Contracts that combine solar power with battery storage have reached an average of 48 €/MWh. The growing interest in batteries is driven by rising development costs and limits on renewable energy production.

European solar prices rise slightly

According to LevelTen Energy, the average solar PPA prices in Europe rose by 0.4% between the second and third quarters of 2026. In the United States, the increase was much higher, at 4.9%.

Rising costs and interest rates push prices up

LevelTen attributes the European increase to factors like higher photovoltaic module prices and rising interest rates. These costs are making project development more expensive and slightly increasing PPA prices to maintain financial viability.

New data presentation method

LevelTen has changed how it reports prices, using an index based on prices from eight quarters earlier, with the reference period set at 1. This method helps track long-term trends more clearly.

European solar index shows recent stabilization

In the third quarter of 2026, the solar PPA index in Europe was 0.86, meaning prices were 86% of those recorded in the third quarter of 2024. The index for wind power contracts was 0.99, showing a much smaller decline.

Hybrid contracts gain ground in Europe

Hybrid contracts that combine solar power with battery storage are growing in Europe. LevelTen recorded such contracts on nine European markets in the third quarter, with Spain and Portugal accounting for nearly half of all these contracts.

Solar prices in Spain continue to fall

In Spain, solar PPA prices without storage fell by 1.2% compared to the second quarter and 7.7% year-on-year. These prices are now approaching the lower limit that still allows projects to secure financing.

Batteries add value to solar contracts

Spanish contracts that include solar and storage have reached 48 €/MWh. This gap reflects the added value of batteries, which allow energy to be shifted to different hours and reduce exposure to low electricity prices.

Hybrid contract prices vary across Europe

In Spain, hybrid contract prices rose by 6.8% in the third quarter, but in Germany, they fell by 12.7%. This shows that adding storage alone is not enough to eliminate price volatility, which depends on market-specific conditions.

Existing installations attract more buyers

In Spain, the increase in renewable production limits is a key factor. These restrictions reached 2.5 TWh in the first half of 2026, more than three times the volume recorded in the same period in 2025.

Existing assets become more prominent

For the first time, LevelTen includes data on PPAs linked to existing installations, not just new projects. These agreements now make up about 40% of transactions on the platform.

Existing assets lower development risk

Existing installations are becoming more attractive because they carry lower development risk. They are largely free from uncertainties related to permits, construction, and delays in starting operations.

Storage helps integrate renewable energy

Storage is becoming an economic lever for Spanish solar projects. It allows buyers to integrate renewable electricity more quickly into their supply portfolios, which can be especially appealing to those prioritizing energy availability and price stability.

European markets shift to a new phase

European power purchase agreement markets are moving away from a period of strong price declines and entering a new phase marked by higher development costs, economic challenges for projects without storage, and the growing use of batteries.

Spain leads in hybrid solar-battery projects

In Spain, where solar PPA prices are among the lowest in Europe and renewable production restrictions are increasing, combining solar installations with battery storage is becoming essential for the economic viability of new projects.