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Spain has cemented its position as Europe's cheapest market for solar energy, with long-term power purchase agreements (PPAs) now at their lowest prices since 2021.

 

Data from the fourth quarter of 2025 shows that solar PPAs in Spain are now priced at €32.50 per megawatt-hour. That's significantly cheaper than Finland at €44, Denmark at €46 and Germany at €49.

 

The drop in prices comes down to what experts call "cannibalisation" in the solar market. Essentially, Spain now has so much solar capacity that during peak sunshine hours, the market becomes flooded with electricity. This oversupply has led to periods of very low, zero or even negative prices, which has in turn pushed down the cost of long-term solar contracts.

 

But the report makes clear that Spain's solar potential is far from exhausted. Like Germany, the Spanish market is now turning to energy storage solutions to make future solar plants more viable. By combining solar panels with battery systems, developers can store excess energy produced during sunny periods and release it when demand is higher and prices are better.

 

The Spanish government has moved to support this shift. In October 2025, it enacted Royal Decree 917/2025, which updated the regulations governing renewable energy production. The new rules are designed to modernise how energy projects connect to the grid and encourage the integration of storage systems across Spain's electricity network.

 

Under the changes, solar projects that include battery storage will get the same priority on the grid as standalone renewable installations. This means developers can add storage without losing their position in the queue to supply electricity.

 

The decree also guarantees that energy sent to the grid from storage systems will be fully paid for and ensures that hours of zero prices won't eat into a project's regulated profits. The result is significantly lower investment risk for solar developers.

 

Across Europe as a whole, solar PPA prices fell by 1% in the fourth quarter, again driven by oversupply and low prices in key markets. Wind power contracts also dropped by 3%, though wind farms remain attractive to corporate buyers because they generate electricity more consistently throughout the day and night. Technology companies in particular are snapping up wind contracts to power their data centres.

 

For homeowners and businesses in Spain, the decision should be a very simple one. With solar technology more efficient and affordable than ever, switching to renewable energy isn't just an environmental choice but a smart financial decision that pays dividends for years to come.

 

Ecocorp Solar, a trusted family-run business serving the Region of Murcia, makes the transition to solar energy completely hassle-free. They offer a free, no-obligation home assessment and quotation service, taking care of all technical and administrative paperwork from start to finish.

 

Once your system is installed, you can monitor your energy production, consumption and savings in real time through an easy-to-use app accessible from your computer, mobile or tablet.

 

Contact Ecocorp Solar using the details or contact form below: