Stable solar PPA prices in North America and Europe in Q1 2025 indicate market certainty and resilience, according to LevelTen Energy
The US solar industry adapts to policy challenges; impact of new tariffs should be visible in Q2
The European solar market is steady despite political uncertainties, a sign for off-takers to initiate procurement
The average solar power purchase agreement (PPA) prices in both North America and European markets remain largely stable in Q1 2025, according to LevelTen Energy, which sees it as a sign of improved certainty for the solar PV market.
In the North America region, P25 solar PPA prices rose by less than 1% quarter-over-quarter (QoQ) with $48.81/MWh, making it the 2nd consecutive quarter of stable prices for the country (see Amid Policy Uncertainty, US Solar PPA Prices Rise 3.3%: LevelTen).
The country’s solar PV industry seems to have adjusted to navigating various policy challenges, including the recent tariffs by the US government, though their actual impact is expected to show in Q2 2025.
For now, the US PPA market is exhibiting ‘resilience and stability as it gears up to cater to the growing demand for clean energy by businesses and utilities,’ according to LevelTen Energy’s Q1 2025 PPA Price Index North America.
The Q1 RFP volume on the LevelTen Energy Platform reached 13 million MWh, which proves the point.
Given the fact that around 80% of Inflation Reduction Act (IRA) related investments have flowed into Republican-leaning districts, LevelTen analysts do not expect the clean energy tax credits to be completely repealed (see US Legislation Proposes Earlier Phase Out Of Clean Energy Tax Credits).
Europe too had its 3rd consecutive quarter of consistent solar PPA prices as Q1 2025 PPA prices rose by only 1% QoQ with €63.11/MWh.
While the regulars like Spain, Italy, and Germany continue to charge ahead with ‘compelling’ PPA offers, smaller markets like Poland, Romania, and Finland, too, are catching up to the trend, according to LevelTen’s Q1 2025 PPA Price Index Europe.
Analysts admit that the European market continues to deal with political uncertainty, including trade disputes, even as the European Commission implements measures to advance decarbonization efforts. Nevertheless, they point out that its Q1 2025 PPA Price Index provides compelling evidence that Europe’s PPA market has achieved the stability that counterparties have been yearning for. This should prompt them to initiate procurements soon.
Complete LevelTen Energy reports are available only to its subscribers; however, a free executive summary is available on its website.