- Pexapark’s latest Renewables Market Outlook 2026 reveals a decisive pivot across European and American clean energy markets
London, 27th January 2026 – Record renewable energy deployment collided with structural headwinds in 2025 to significantly alter power price formation, according to the latest annual report from Pexapark, the price intelligence platform for clean energy. These dynamics helped utilities and commodity traders gain market share and forced IPPs to double-down on BESS, Pexapark reported.
As renewables reached nearly half of EU electricity generation in 2025, structural volatility and price cannibalization moved from transitional risks to persistent, systemic market features. Meanwhile, the U.S. market faced a year of extremes, where record deployment collided with significant policy-driven headwinds.
“2025 marked the moment renewables became the dominant technology block in Europe, but that success brings complex new headwinds,” said Luca Pedretti, COO and Co-Founder at Pexapark. “We are seeing a ‘Big Repricing’ where the focus is no longer just on capacity build-out, but on managing structurally higher volatility. The winning model is shifting from asset-centric to revenue-centric.”
Europe: Flexibility deals on the rise as PPA activity cools
In a record-breaking year for flexibility in Europe, nearly 12 GW / 23 GWh of battery energy storage system (BESS) capacity was contracted under Flexibility Purchase Agreements (FPAs) and optimization deals in 2025 – tripling the volume recorded in 2024. FPAs have emerged as the backbone of BESS bankability in 2025, unlocking capital and enabling rapid scale-up beyond Great Britain into Germany, Italy, and the Netherlands.
In contrast, traditional European PPA momentum cooled in 2025 as the market adjusted to lower capture expectations. Total disclosed contracted PPA capacity fell to 13.1 GW across 247 deals, down from 15.3 GW in 2024.
Within these cooler PPA market conditions, utilities firmly repositioned themselves toward the center of power markets, relying on their diversified portfolios to intermediate volatility. Utilities increased PPA offtake volumes by over 200% year-on-year and accounted for 77% of contracted FPA volumes in Europe in 2025, leveraging portfolio scale, strong balance sheets, and flexibility assets.
Meanwhile, the traditional ‘invest-and-forget’ model for Independent Power Producers (IPPs) is being rewritten under tighter market conditions. Value creation is no longer anchored solely in asset ownership, pushing IPPs downstream toward revenue management, structuring and portfolio optimization.
At the same time, corporate buyers are splitting into two camps: a small group of advanced players (notably big tech) moving toward firm power and utility-like strategies, while much of the broader corporate market is grappling with the market’s complexity, sometimes holding back procurement.
Europe: Spain retains PPA crown while Germany sees slowdown
Despite the overall slowdown in European PPA activity, Spain retained its position as Europe’s largest PPA market with 3.9 GW contracted, followed by Italy at 1.8 GW and Poland at 1.5 GW. In contrast, Germany recorded the steepest year-on-year decline among major markets as severe solar cannibalization and a widening gap between buyer and seller expectations eliminated the ‘transactable price range’.
Iberdrola once again secured the top seller position globally, contracting 1,088 MW across 13 deals, while Amazon remained the leading corporate buyer, closing 711 MW across five deals.
United States: Record clean-energy buildout combined with rising policy risk weighs on the market
For the first time, Pexapark’s Outlook includes a dedicated section on the U.S., where the narrative shifted from expansion to caution. While the U.S. added clean energy at record speed in 2025, policy-driven uncertainty exposed growing fragility beneath the surface.
The passage of OB3 accelerated tax credit sunsets and increased sourcing risks. The increased supply uncertainty, combined with strong load growth expectations, pushed solar and wind PPA Fair Values up by 8% and 16% respectively over the year in ERCOT. With tax-eligible projects becoming scarcer, developers gained significant pricing leverage even as overall PPA volumes declined by 42% year-on-year.
Corporate demand remained a vital engine in the U.S. across 2025, with the Information Technology sector accounting for 82% of corporate PPA volumes, largely driven by hyperscalers supporting AI infrastructure and data center expansion.
In contrast to rising renewables prices, battery storage tolling prices in early-adopter markets like ERCOT and CAISO declined as rapid capacity additions led to visible market saturation and compressed intra-day spreads. Despite these near-term headwinds, long-term storage valuations reached record highs across ERCOT hubs, signaling confidence in storage as a core reliability asset for the grid.
A global ‘repricing’
“Across both Europe and the U.S., renewable power markets are entering a fundamentally new phase,” Luca Pedretti added. “As volatility becomes the dominant market force, flexibility is becoming the real source of value. Storage, optimization and portfolio-level strategies are no longer just ways to improve returns – they are essential to remaining bankable and competitive in today’s power markets.”
The Renewables Market Outlook 2026 also includes analysis on how:
- Negative prices and declining capture rates reset asset economics in Europe
- Europe’s market participants are adapting, but not evenly
- Battery storage is moving to the center of Europe’s market design
- Policy uncertainty and demand growth are driving repricing in the U.S.
- U.S. battery storage pricing diverges from generation
- Flexibility is defining value across both the U.S. and Europe
The full report can be downloaded through this link here.
About Pexapark
Pexapark is the price intelligence platform for clean energy. Covering solar, wind, and battery storage across more than 20 countries, Pexapark helps clean energy buyers, sellers, and investors navigate increasingly complex power markets with confidence. To do this, the company combines market-based insights and pricing solutions with expert-led transaction facilitation.
Unlike fundamental assumptions or infrequent RFPs, Pexapark is powered by real market data sourced on an ongoing basis from more than a hundred counterparties.
This enables Pexapark to provide a market consensus view on otherwise non-transparent PPA and BESS contracts. As a result, both new entrants and experienced players trust Pexapark to connect the dots across every stage of clean energy commercialization – from pre-transaction analysis, to price negotiation, to post-transaction performance and exposure management.
Founded in 2017 by power traders, Pexapark has facilitated over 40,000 megawatts of transactions and currently serves more than 250 customers across Europe and the US.
For more information, contact hello@pexapark.com.