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European solar power purchase agreements (PPAs) bucked four consecutive quarters of declining prices, with central European countries posting the largest quarterly increases amid surging gas prices. Wind PPA prices decreased for a fifth consecutive quarter, as the value-adding benefits of storage cause hybrid deals to surge across the continent.
That’s according to LevelTen Energy’s latest European PPA Price Index, released on 23 July, which features hybrid PPA data for the first time.
Wind PPA prices fell by 1.6% in the second quarter of this year, according to analysis of data from LevelTen Energy, the world’s largest clean energy marketplace. At the same time, the market-averaged solar PPA price broke its year-long decline, rising by 2.8%. This trend was driven by potent price increases in Germany and Poland — markets where the impacts of tightened global gas supply disproportionately pushed up wholesale power prices.
The picture is more complex at the market-specific level, however.
“Although the European average price for solar rose this quarter, individual market trends diverge significantly”, said Placido Ostos, Director of European Analytics at LevelTen Energy. “This past quarter brought German and Polish price rises substantial enough to increase the European average, even while other markets declined.”
Dropping solar PPA prices in recent years have been driven by high supply amidst growing negative-price risk. This dynamic has been most intense in markets with high solar penetration like Spain and Germany. When large amounts of solar generation come online at the same time, the resultant oversupply can drive market prices to low or negative levels, hindering project revenues. This increase in negative prices is accelerating: France, Germany, Spain, and Poland all recorded more negative price hours in the first half of 2026 than during all of 2025.
“In markets with severe solar price cannibalisation,” Mr Ostos continued, “two things are occurring simultaneously. The first is immense competition between projects, amid solar oversupply that is causing price cannibalisation. This leads to a second issue: solar PPAs face limited captured prices on the market, forcing developers to offer very low PPA strike prices to appeal to buyers. Both contribute to the downward price slide occurring in several markets.”
Developers are responding by hybridising solar projects — pairing them with battery storage — unlocking new flexibility in power delivery, and additional revenue opportunities.
LevelTen’s new hybrid index shows hybrid PPAs are priced 24% higher than solar PPAs and 15% lower than wind PPAs. However, hybrid PPAs can deliver significantly higher settlement values. Analysis from LevelTen shows that, in some markets like Germany, adding storage to a solar project can increase captured values by up to 80%.
In light of the increased value delivered by hybrid PPAs, many corporate energy buyers are turning to them over standalone PPAs.
Germany and Spain are flagship market for hybrid structures. A full 29% of all European PPA offers included in LevelTen's Q2 PPA Price Index were from Spanish and German hybrid projects. Both countries hosted more hybrid PPA offers across the quarter than any other deal type — a pattern that also held for Bulgaria, Poland, Latvia, Greece, Lithuania and Portugal.
“As a country experiencing severe levels of cannibalisation and negative pricing, the market for hybrid PPAs in Germany is substantial.” said Pieter van der Meulen, Country Manager for Germany at LevelTen Energy Europe. “We have seen particular traction for so-called Green BESS deals, in which the battery asset can charge only from a co-located renewable generation asset. These structures face far fewer regulatory hurdles compared to batteries with bi-directional access to the grid, while still providing significant added value for buyers.”
“Storage provides many new product types which can alleviate market pressures, enhancing the value of a PPA for both buyers and sellers.” added Mr Ostos. “At LevelTen, we’ve seen fast-growing market traction for hybrid offers, with the number of new hybrid offers in Q2 more than doubling year over year.”
A free executive summary of the report is available here.
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