Public solar auctions and corporate power purchase agreements (PPAs) accounted for 92 GW of solar installations across the European Union (EU) between 2022 and 2025, according to a report by SolarPower Europe.

Auctions and PPAs for Solar Deployment

Competitive public auctions and corporate PPAs have become central policy and market instruments supporting solar deployment in Europe.

Auctions, typically structured around contracts for difference (CfDs) or similar long-term revenue mechanisms, provided price stability for developers and reduced market risks. Meanwhile, corporate PPAs enabled private companies to procure renewable electricity directly from solar projects through long-term supply agreements.

According to the report, more than 25 GW of solar capacity has been deployed through corporate PPAs in Europe, highlighting the growing role of the private sector in financing renewable energy projects.

These long-term procurement contracts also gained importance after the 2022 energy crisis, when volatile fossil fuel prices prompted companies to seek stable, predictable electricity costs.

Dries Acke, Deputy CEO at SolarPower Europe, said that EU leaders already have effective tools to shield the region from future fossil fuel price shocks. “Corporate PPAs and auctions awarding CfDs are proven solutions. Europe must boost industrial electrification and improve access to PPAs while ensuring auctions are properly designed to avoid missed opportunities and undersubscription,” he said.

Auction Performance

The report analyses auction developments during the first half of the 2020s, highlighting that the quality of auction design strongly affects solar deployment outcomes.

It found that the early part of the decade was characterized by systemic barriers, including low-ceiling tariffs, technology-neutral auction structures, administrative delays, and complex non-price evaluation criteria.

Solar auction allocations reached a previous peak of 14.8 GW in 2021, but performance declined during 2022 and 2023. This was caused by rising equipment costs during the energy crisis, with auction price ceilings remaining relatively low.

These factors made several projects financially unviable and discouraged developer participation in many tenders.

The report also identified undersubscription as a persistent issue. Nearly half of the EU auction rounds between 2021 and 2025 attracted bids below the offered capacity. This meant that governments were unable to award the full capacity they had planned.

Record Solar Auction Capacity in 2025

Policy reforms implemented across several European markets helped improve auction outcomes. Governments adjusted tariff ceilings, simplified procedures, and refined eligibility criteria to better reflect market conditions.

As a result of these reforms, solar auction volumes rebounded strongly in 2025. EU auctions and tenders awarded a record 25.2 GW of solar capacity during the year, a 23% increase over 2024 and the region’s highest annual allocation.

The report notes that this rapid recovery demonstrates how improvements in auction frameworks can significantly accelerate renewable energy deployment. However, policymakers must continue refining these mechanisms to maintain momentum.

Solar-BESS Hybrid Auctions

Hybrid projects combining solar generation with battery storage are becoming more common in auction systems.

In 2025 alone, the EU supported almost 70 GWh of utility-scale battery energy storage systems (BESS), signaling a growing link between solar deployment and storage investment.

Corporate PPA Market Dynamics

The corporate PPA market followed a different trajectory. In the immediate aftermath of the energy crisis in 2023 and 2024, there was strong growth in corporate solar PPAs, as companies sought long-term contracts to manage electricity price volatility.

However, announced corporate PPA volumes declined in 2025 compared to the previous year, marking the first drop after several consecutive years of expansion. The report attributed this slowdown to a range of structural challenges affecting several European markets.

In some countries, market price erosion, grid congestion, and curtailment risks have reduced the attractiveness of PPAs. These issues were particularly evident in Germany, which is the second-largest corporate solar PPA market in Europe.

The country recorded a 56% decline in signed corporate solar PPA volumes in 2025.

The early growth of corporate PPAs was primarily driven by relatively straightforward projects and corporate buyers. As these opportunities have largely been utilized, future demand will increasingly depend on new industrial consumers and electrified industrial processes seeking a long-term supply of renewable electricity.

Regional Market Variations

Corporate PPA activity also varied significantly across European countries due to differences in electricity markets and energy policies. Spain remained the leading corporate solar PPA market, with more than 2 GW of solar PPAs signed annually between 2023 and 2025.

Other markets such as Italy, Poland, and Bulgaria also recorded strong growth in corporate PPAs. These countries continued to rely heavily on gas-fired electricity generation, resulting in comparatively high wholesale power prices that encouraged companies to sign renewable electricity supply contracts.

Policy Recommendations

The report recommended five policy initiatives to strengthen the contribution of auctions and corporate PPAs to Europe’s energy transition.

These include improving auction design through appropriate ceiling tariffs and technology-specific tenders, simplifying administrative procedures, providing long-term policy visibility to attract investment, integrating energy storage into public support frameworks, and strengthening policy support for corporate PPAs as a complementary market-driven mechanism for renewable energy deployment.

Earlier this year, the EU installed 27.1 GWh of new battery storage capacity in 2025, marking a 45% year-over-year increase and the bloc’s 12th consecutive record year, according to  SolarPower Europe’s EU Battery Storage Market Review 2025.

In August 2025, the EU is projected to install 64.2 GW of new solar capacity in 2025, down from 65.1 GW in 2024, a projected 1.4% annual decline, the first since 2015, according to SolarPower Europe’s mid-year market report.