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

published on 29 September 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.

The M&A market in Europe has experienced a surge in activity, particularly in emerging markets like Poland and Sweden. Poland's increasing focus on green energy has contributed to its growth, while Sweden's reliance on hydroelectric power has resulted in stable power prices. Additionally, Sweden's potential as a power exporter has made it an appealing investment destination. Consequently, both private equity firms and major utility companies have entered these markets to expand their portfolios and operations in Europe.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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