LevelTen Energy has reported contrasting solar PPA price trends for Q2 2026, with prices falling in North America for the first time in two years while rising in Europe for the first time in a year. The reports also point to changing buyer activity and growing demand for battery-backed renewable energy contracts.
In its Q2 2026 North American PPA Price Index Report, LevelTen Energy says that the US solar PPA prices declined in Q2 2026 for the first time in two years, with the market average falling 4.8% from the previous quarter to $61.40/MWh. Excluding the sharp decline in the CAISO market, which represented a small share of total offers, the drop was 1.8%.
Analysts spotted lower prices across most markets, driven mainly by weaker buyer demand, although reduced solar project costs may also have contributed. Large technology companies continued to procure renewable energy at scale, while many commercial and industrial (C&I) buyers remained cautious due to uncertainty over Greenhouse Gas Protocol (GHGP) revisions and relatively high PPA prices. Additionally, the report expects developers to have lowered prices to remain competitive.
According to the report, technology companies continue to drive renewable energy procurement, while many other corporate buyers remain on the sidelines.
Compared to solar, wind PPA prices increased 5.5% quarter-on-quarter (QoQ) and 17.5% year-over-year (YoY) as the sector faced higher tariffs and rising transportation and gas costs. Delays in federal permitting have also limited the development of new wind projects.
It also notes that the July 4, 2026 deadline for qualifying US renewable energy projects for tax credits has passed, meaning few additional projects will be eligible. Projects that qualified must remain operational by the end of 2030 to receive the credits. The report expects the shrinking pipeline of tax-credit-eligible projects will likely contribute to increasing PPA prices unless there is a ‘substantial policy turnaround’ in the coming years.
It says that although solar PPA prices have eased, factors such as tariffs, higher insurance and labor costs, permitting challenges, and reduced tax credit availability are likely to limit further price declines. The report also highlights the European Commission's AccelerateEU package, which aims to speed up renewable energy deployment and permitting
Europe
In Europe, solar PPA prices increased 2.8% in Q2 2026, marking the first quarterly rise in a year as the average price reached €56.58/MWh. LevelTenEnergy attributes the increase to higher prices in Poland, while price movements varied across other markets.
There was renewed activity in the Nordic region, with Denmark, Finland and Sweden returning to the index as market liquidity improved.
Growing demand for battery-backed renewable energy contracts is a growing trend in the market, particularly in countries with higher PV penetration such as Germany and Spain. Battery storage, according to the report, is becoming increasingly important for corporate renewable energy procurement. During the reporting quarter, the average P25 PPA price for hybrid projects was €71.58/MWh.
LevelTen says interest in hybrid PPAs is sufficient to launch a new Hybrid PPA Index covering projects that combine renewable generation with energy storage, as these help address falling solar capture prices and periods of negative electricity prices.
The Q2 2026 European PPA Price Index Report adds that European wind PPA prices declined 1.6% in Q2, continuing their long-term downward trend, owing to factors such as Poland's relaxed onshore wind permitting rules and Italy's combination of high wholesale electricity prices and low curtailment.
According to the report, geopolitical developments such as the conflict in the Middle East and the closure of the Strait of Hormuz reinforce the value of PPAs.
The report also highlights the European Commission's AccelerateEU package, which aims to speed up renewable energy deployment and permitting, while rising Guarantees of Origin (GO) prices. These factors make long-term PPAs more attractive for corporate buyers (see AccelerateEU Backs 200 GW Storage Ambition By 2030).
Details of both reports are available on LevelTen Energy’s website.
