Q4 2024 Prices: EU-North America See Fall In Solar, Wind Sees Marginal Uptick

Q4 2024: Global West See Fall In Solar Prices, Wind Sees Marginal Uptick

The latest report by LevelTen Energy showcases the energy Power Purchase Agreement (PPA) trend for Q4, 2024 in the global west, i.e., the  European and the North American market. The report found that the European solar PPA prices have been steadily declining over the last two years, as the energy sector continues to return to relative normalcy following the continent’s energy crisis, finds, LevelTen Energy’s Q4 report. In the latest quarter, LevelTen’s Market-Averaged Continental Solar Index declined by 2% compared to Q3, with price declines in nearly every solar market featured on our Q4 Index.

The report stated, “Q4 saw Nordic solar markets re-emerge, with Finland, Sweden, and Denmark all making a strong showing. Polish prices also posted a material drop, a sign that the PV sector there continues to mature and gain momentum in a nation still highly dependent on coal power. French solar prices also continued their downward price trend, with pre-operational solar projects in France growing in number on the LevelTen Energy Marketplace. Fast-shifting political winds in France amidst a budgetary crisis have significantly heightened regulatory risk for developers there, who may be looking more to corporate buyers to provide the offtake contracts they need to finance their projects.:

Q4 Sees Wind Prices Temper

Europe’s wind sector continues to regain its footing after a difficult few years of supply chain snarls, inflationary challenges, and financing turbulence. The study stated, “After dropping for several consecutive quarters, LevelTen’s Market-Averaged Continental Wind Index nudged up by 1% in Q4. On a year-over-year basis, Market-Averaged wind prices have gone down by 9%.”

Wind development in many European markets still faces many constraints, including high turbine costs and congested interconnection queues. The report found, “These factors can increase uncertainty around projects’ CapEx and development timelines. Still, in markets like Finland, wind development continues to move forward with strong momentum, with a high procurement appetite from industrial and data center buyers. However, offshore wind in the Baltic Sea faced a substantial setback in November when the Swedish government rejected the applications of 13 offshore wind farms totaling 32 GW in capacity due to overriding concerns over national security.”

Europe’s PPA Market Going Strong

The continuing trend of moderating PPA prices is welcome news for corporate renewable energy buyers in Europe. As the energy transition evolves, European wholesale electricity markets are becoming more volatile. The report found, “The demand for clean energy is poised to keep rising from a diversity of resources, including renewable hydrogen producers and the fast-growing needs of data center operators. Many of these buyers are large, sophisticated entities who can move at speed and procure in large volumes. And particularly in countries with robust government auctions, like Germany and the UK, corporate buyers face competition from multiple sources. Buyer teams are encouraged to prioritize early stakeholder alignment and education and to have a firm understanding of which contracting elements they can be flexible on to increase their likelihood of transactional success.”

Q4 North American PPA Price Index Report

For the Q4 2024, Solar Prices Hold Steady, the study showed,  “It saw P25 solar PPA prices on LevelTen’s Market-Averaged Continental Index move up by a modest 0.3% quarter over quarter. This price movement was muted by a significant 14.5% price drop in Alberta. Removing Alberta (AESO) from the Q4 Market-Averaged Continental Solar Index reveals a more substantial 3.3% quarterly rise in solar PPA prices across the US.  The increase in solar pricing in the United States may be related to uncertainties around tariffs, tax credits, and transmission build-out.”

Wind Prices Rise in Q4

After remaining flat during Q3, P25 wind prices on LevelTen’s Market-Averaged Continental Index rose by 3.3% in Q4. On a year-over-year basis, they have risen by 13%.  President Donald Trump has advocated for ending offshore wind development and supporting “a policy where no windmills are being built.” While it has yet to be seen how much the Trump administration will hinder wind development in practice, this regulatory uncertainty may have contributed to Q4’s rising wind PPA prices.