North America vs. Europe: Diverging Solar PV Prices – Rising Prices vs. Continuing Declines

In the third and fourth quarters of 2025, the price of Solar Power purchase agreements (PPAs) signed in North America rose 3.2%, reaching a high of $61.67 per megawatt-hour.

This is one of the key findings of two reports released last week by market analysis firm LevelTen Energy, covering the Renewable Energy PPA market in North America and Europe.

North American solar data shows that solar PPA prices rose 9% between the end of 2024 and 2025. However, among the various technologies analyzed by LevelTen, solar PPA prices remained the lowest, with wind ($73.77 per megawatt-hour) and hybrid ($67.70 per megawatt-hour) averaging higher prices.

However, solar PPA prices increased by 3.2% quarter-over-quarter, a much higher increase than hybrid PPAs and in stark contrast to the decline in the average price of wind PPAs. In the third quarter, the average price of solar PPAs was $59.77 per megawatt-hour, meaning a monthly increase of more than $1 per megawatt-hour.

Since the start of President Trump's second term at the beginning of the year, prices for all three technology types have shown a relatively stable upward trend. At the beginning of the year, the average price of wind power power purchase agreements (PPAs) was below $65/MWh, hybrid power purchase agreements (PPAs) averaged slightly above $60/MWh, and solar PPAs averaged below $60/MWh.

“Significant regulatory headwinds persist,” LevelTen stated in its analysis of the North American PPA market. “Uncertainty surrounding the ongoing Section 232 tariff investigation has increased development costs, while stringent new federal-level licensing procedures have stalled numerous development projects nationwide.” The analysis firm points out that Section 232 and the Foreign Entity of Concern (FEOC) rule exemplify the chaos in the US renewable energy industry caused by policy uncertainty.

However, the price range for North American average PPA prices, which do not use the market average, is more compact. This non-market average calculation covers all recorded PPAs in North America but does not give extra weight to agreements entered into within the grids of large independent system operators (ISOs) such as ERCOT and CAISO.

Without using market average prices, the average prices of power purchase agreements (PPAs) for wind, hybrid, and solar power differ by less than one dollar, at $53.85, $53.06, and $53.03 per megawatt-hour, respectively. This marks the second consecutive quarter of quarter-on-quarter decline in solar PPA prices.

European PPA Prices Continue to Fall

Meanwhile, according to LevelTen's second report released last week, average PPA prices for renewable energy in Europe continue to decline. The report shows that the average market price for solar PPAs reached €57.44 per megawatt-hour ($68.14 per megawatt-hour), a figure higher than in North America, but with significant differences between long-term and short-term trends.

For example, the average price of solar PPAs signed in Europe has fallen from slightly below €80 per megawatt-hour at the end of 2022 to the recent €57.44 per megawatt-hour, with similar price declines observed in the wind and hybrid power sectors. Recently, the average price of solar PPAs in Europe has fallen from €58.21 per megawatt-hour in the third quarter of 2025 to below €58 per megawatt-hour in the fourth quarter. LevelTen believes the long-term downward price trend is influenced by the lag in renewable energy demand compared to supply, while "many European markets continue to experience low and negative electricity prices." A similar report released last week by another analysis firm, Pexapark, stated that negative electricity prices and price erosion are "persistent and systemic" characteristics of the European market.

LevelTen also indicated that significant changes to European power and grid infrastructure are likely in the coming months as the European Commission moves forward with its "grid package" (proposed last December to improve connectivity infrastructure across the continent), which will impact electricity prices. The analysis firm will host a webinar later this week to further explore insights from its latest European power purchase agreement report.