As the bloc enters a new phase of its energy transition, national auctions drive utility-scale growth while the corporate PPA market faces a "moderate slowdown."
The European Union's solar photovoltaic sector closed out 2025 on a high note for public auctions, with member states awarding a record 25.2GW of capacity through tenders, according to a new report from industry body SolarPower Europe.
The report, titled "Auctions and Corporate PPAs: European Market Review 2025," highlights a landmark year for renewable energy financing in Europe. The data shows a 23% increase in auction awards compared to the previous year, underscoring the growing reliance on state-backed mechanisms to bolster energy independence .
Auction Dominance Shifts to Utility-Scale Solar
SolarPower Europe attributes the record year to stabilizing economic conditions and a strategic pivot towards larger projects. Following the volatile energy markets triggered in 2022, auctions have become a critical tool for protecting economies. In 2025, the share of utility-scale solar in total awarded capacity surpassed 80%, a significant leap driven by "continued competitive tenders" that kept bid prices low .
Italy emerged as a standout performer, awarding an "exceptionally high" 10.8GW through its Fonti di Energia Rinnovabile (FER) X tenders. This accounted for more than half of the continent's total auctioned volume for the year, demonstrating how well-designed national schemes can rapidly accelerate deployment . Meanwhile, Germany continued its steady leadership, having awarded nearly 25GW of solar capacity via auctions since 2022. SolarPower Europe notes that these auctions have been the "most impactful deployment tool" for Germany's solar growth, proving that government tenders are essential for driving both short-term and long-term investment .
The Rise of Utility-Scale Battery Storage
The report also sheds light on the parallel growth of battery energy storage systems (BESS), particularly in the utility segment. In a historic shift, utility-scale BESS accounted for 55% of new storage additions in 2025, overtaking the residential sector for the first time. Of the 70GWh of utility-scale BESS procured last year, approximately 50GWh were contracted through Capex-based support schemes funded by EU initiatives like the Modernisation Fund.
Countries such as Poland, Spain, and Portugal have introduced dedicated battery storage auctions, many of which were expanded due to "overwhelming interest." This indicates robust demand for storage projects when financial mechanisms help mitigate initial capital expenditure requirements .
Corporate PPAs Experience a "Moderate Slowdown"
In contrast to the public auction boom, the corporate power purchase agreement (PPA) market saw a deceleration. The volume of solar capacity secured through PPAs fell to just under 6GW in 2025, a dip from the previous two years' highs. SolarPower Europe describes this not as a "structural decline" in corporate appetite, but as a "moderate slowdown" influenced by market saturation in mature economies.
Germany, one of Europe's most established renewable energy markets, saw PPA-signings drop by 56% between 2024 and 2025. Analysts point to "price cannibalisation, grid congestion, and falling price expectations" as key factors dampening demand in these advanced markets . However, this trend is not uniform across the bloc. Italy and Poland bucked the trend, with Poland recording a 33% year-on-year increase in corporate signings, driven by high wholesale electricity prices and a strong incentive for corporate hedging .
Looking Ahead: Integration and Flexibility
As the EU enters a new phase of its energy transition, the focus is shifting from sheer volume to system integration. SolarPower Europe recommends that policymakers refine auction designs to support technology-specific tenders and integrate energy storage into solar frameworks. "Removing market and regulatory obstacles to combining solar PV and BESS under a single contract will be key to unlocking the next wave of private PPAs," the report concludes .
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