In 2025, the gap between wholesale price indicators and realised project revenues widened further. For developers, this gap became the defining feature of PPA valuation.

Solar capture rates reached new lows in several core markets, driven by rapid capacity additions and concentrated daytime generation. Even where average prices increased year on year, realised revenues declined relative to baseload benchmarks. Wind performed more robustly in many regions, yet here to capture stability rather than price levels determined bankability.

Volatility amplified these effects. Price distributions widened, and the occurrence of extreme price outcomes increased. As a result, balancing costs and shaping assumptions moved from secondary considerations to primary drivers of fair value. Contracts priced on historic baseload correlations increasingly failed to reflect actual revenue outcomes.

This environment exposed the limits of simplified valuation approaches. Pay-as-produced PPAs without flexibility or portfolio optimisation embedded growing downside risk for developers. In markets with high solar penetration, even short-tenor contracts struggled to offer predictable cash flows without structural mitigation.

Developers that recognised this shift adjusted accordingly. Technology mix, location, and access to flexibility became as important as headline PPA prices. Where storage or portfolio structures were available, capture erosion could be partially mitigated, though at the cost of increased modelling complexity.

Understanding these dynamics is now essential. In 2026, capture rates and volatility will continue to shape PPA pricing more than nominal price levels.

Detailed capture analysis, historical benchmarks, and valuation implications are available in the full PPA market review of 2025 and outlook.

If capture rates, volatility, and realised revenues are central to your project assessments, Veyt’s monthly cross-market update follows these dynamics as they unfold across markets.