The average price of a solar power purchase agreement (PPA) in Europe fell to €34.25/MWh (US$40.05) in the third quarter of 2025, according to the latest report from LevelTen Energy. This represents a 3% decline from the previous quarter and a 19.4% drop compared to the same period in 2024.

Solar PPA prices remain significantly lower than other renewable technologies. During Q3 2025, the average wind PPA price stood at €52.75/MWh, marking a 1.4% increase quarter-on-quarter. Meanwhile, blended PPA prices (covering both wind and solar) declined by 1% to €35.55/MWh.

LevelTen’s analysis indicates that the sharp drop in solar PPA prices reflects the growing issue of solar price cannibalization across several European markets. This phenomenon occurs when high solar generation during daylight hours suppresses wholesale electricity prices, reducing the overall market value of solar energy.

As a result, investors are increasingly shifting their focus toward solar-plus-storage projects, combining photovoltaic systems with battery energy storage systems (BESS) to enhance flexibility and mitigate price volatility.

LevelTen concludes that while falling PPA prices may challenge the economics of standalone solar projects, they also highlight the growing importance of hybrid renewable solutions in Europe’s evolving power market.