Analysis of the Week: Evolving landscape of solar M&A- Europe’s top markets under the spotlight (2017-2023)

In recent years, there has been a significant increase in mergers and acquisitions (M&A) focused specifically on solar assets in Europe. While operational assets were previously the primary drivers of M&A activity, there has been a noticeable shift in attention towards assets that are still under development. The proportion of transactions dedicated to these developmental assets has experienced a remarkable rise, increasing from just 6% in 2017 to an impressive 67% in the year-to-date of 2023. This steady increase can be attributed to the growing demand for renewable power in Europe, which has been further fueled by the geopolitical tensions between Russia and Ukraine, as well as Europe’s increasing ambition for energy self-reliance.

Spain has become a significant force in the increasing M&A activity within Europe due to its well-established assets and advantageous conditions. Despite the volatility in Europe, Spain’s power pricing structures have proven to be resilient, and the country boasts a sophisticated PPA landscape as well as government-backed incentives such as expedited permitting timelines. These factors have played a pivotal role in driving M&A engagements in Spain. Additionally, other established European markets like the UK and Italy are also experiencing growth, supported by favorable state policies and a high demand for power.