Solar Plant Secondary Market: How to Value and Sell Photovoltaic Assets in Spain

Introduction

The secondary market for photovoltaic assets in Spain has experienced explosive growth since 2020. If in 2015-2018 only €200-300M annually closed in operational plant transactions, in 2025 volume exceeded €3,500M, with more than 4 GW of capacity changing hands.

Why this boom? Several factors converge:

1. Market maturity: Thousands of plants with > 5 years of operational history (reliable data for valuation)
2. Infrastructure funds: International capital seeks low-risk assets with 7-10% returns
3. Professionalized developers: “Build-to-sell” business model (build and sell at COD)
4. Refinancing pressure: Plants financed in 2018-2020 with expensive debt seek to refinance or sell

For an asset manager, understanding how these transactions are valued and negotiated is critical whether you’re a seller (maximize price) or buyer (avoid overpaying). In this article, we’ll break down standard valuation multiples, factors that add or subtract value, the typical M&A process, and 2025-2026 price trends.

1. Fundamentals of photovoltaic asset valuation

Valuation methods

Method	Description	Primary Use
DCF (Discounted Cash Flow)	Projection of discounted future cash flows	Technical valuation (banks, funds)
EBITDA Multiple	Enterprise Value / EBITDA	Quick market comparison
€/MWp installed	Enterprise Value / Installed power	Benchmark by technology/zone
Revenue multiple	Enterprise Value / Annual revenue	Less used (doesn’t reflect profitability)

In practice, deals are negotiated in EBITDA multiples, but validated with DCF.

Enterprise Value (EV) formula

$\text{EV} = \text{Equity Value} + \text{Net Debt} - \text{Cash}$

Example:

• Share purchase price (equity): €15M
• Existing debt: €8M
• Cash on balance: €0.5M
• EV = 15 + 8 - 0.5 = €22.5M

Important: Transactions are negotiated in EV terms (buyer assumes debt).

2. EBITDA multiples in Spain (2025-2026)

Range by asset type

Asset Type	EBITDA Multiple (EV/EBITDA)	Comment
Merchant (no PPA)	6.0 - 8.0x	Exposure to market volatility
Short-term PPA (< 5 years)	7.0 - 9.0x	Limited stability
Medium-term PPA (5-10 years)	8.5 - 11.0x	Market standard
Long-term PPA (> 10 years)	10.0 - 13.0x	Premium for visibility
PPA with investment grade off-taker	11.0 - 14.0x	Maximum value (minimal counterparty risk)

2025-2026 Trend: Multiples have compressed slightly vs 2023-2024 (when they touched 12-15x) due to:

• Greater asset supply
• Rising interest rates (higher cost of capital)
• Competition among sellers

Factors that modify the multiple

Positive factors (+1 to +3x):

Factor	Impact on Multiple
PPA > 10 years with BBB+ off-taker	+2.0 - 3.0x
Plant < 3 years (modern technology)	+0.5 - 1.0x
Performance Ratio > 82% (historical)	+0.5 - 1.0x
Location in high irradiance zone (Andalusia)	+0.3 - 0.5x
O&M contract with Tier 1 manufacturer	+0.3 - 0.5x
Low curtailment (< 1% historical)	+0.5 - 0.8x

Negative factors (-1 to -3x):

Factor	Impact on Multiple
PPA expiration in < 2 years	-1.5 - 2.0x
Land contract < 15 years remaining	-1.0 - 2.0x
Chronic curtailment (> 5% annual)	-1.5 - 2.5x
Equipment out of warranty (> 10 years)	-0.8 - 1.2x
Performance Ratio < 75%	-1.5 - 3.0x
Pending litigation (permits, connection)	-2.0 - 4.0x

3. Valuation by €/MWp: Geographic benchmark

Typical 2025-2026 prices

Zone	€/MWp (EV)	Range	Typical Production (kWh/kWp)
Andalusia	950,000 - 1,100,000	High	1,750 - 1,850
Extremadura	900,000 - 1,050,000	Medium-High	1,700 - 1,800
Castilla-La Mancha	850,000 - 1,000,000	Medium	1,650 - 1,750
Aragón	800,000 - 950,000	Medium	1,550 - 1,650
Galicia	650,000 - 800,000	Low	1,300 - 1,400

Note: Prices assume plant with 8-10 year PPA, 3-5 years operation, PR > 80%.

Calculation example

25 MWp Plant in Seville:

• Benchmark: €1,000,000/MWp
• Estimated EV: €25M

Validation with EBITDA:

• Annual production: 43,750 MWh (1,750 kWh/kWp)
• Revenue (PPA €40/MWh): €1,750,000
• OPEX: €200,000 (€8/kWp)
• EBITDA: €1,550,000
• EV / EBITDA: €25M / €1.55M = 16.1x

Interpretation: 16x multiple is high (implies > 10 years remaining PPA or very aggressive buyer).

4. Typical M&A transaction process

Timeline (6-12 months)

Phase 1: Preparation (2-3 months)

Action	Responsible	Deliverable
Teaser (1 page)	Seller + M&A advisor	Anonymous asset description
Target buyer list	M&A advisor	20-30 funds/companies
Data room preparation	Seller	150-300 scanned documents
Indicative Bids (IOI)	Buyers	Non-binding price range

Phase 2: Due Diligence (2-4 months)

DD Type	Duration	Typical Cost
Technical	4-6 weeks	€40,000 - 80,000
Legal	3-4 weeks	€30,000 - 60,000
Financial	2-3 weeks	€20,000 - 40,000
Environmental	2 weeks	€10,000 - 20,000
Insurance	1-2 weeks	€5,000 - 10,000

Phase 3: Negotiation (1-2 months)

• Binding Offer
• Share Purchase Agreement (SPA) draft
• Warranties negotiation (seller guarantees)
• Price adjustments negotiation
• Escrow agreements (guarantee funds)

Phase 4: Closing (1 month)

• SPA signing
• Obtaining conditions precedent (regulatory approvals)
• Financial closing (payment)
• SPV transfer (owner company)

5. Transaction structures

A. Share Deal (Purchase of SPV shares)

Description: Buy 100% of shares of company that owns the plant.

Advantages:

• Permits and contracts don’t change owner (simplifies procedures)
• Tax advantage: doesn’t pay ITP (Property Transfer Tax)

Disadvantages:

• Buyer assumes hidden liabilities of company
• Requires extensive warranties from seller

Use: 90% of transactions

B. Asset Deal (Asset purchase)

Description: Buy assets (panels, inverters, permits) without acquiring company.

Advantages:

• Don’t inherit company liabilities
• Cleaner accounting

Disadvantages:

• ITP: 4-6% of value (depending on region)
• Permits and contracts must be transferred (slow and complex)

Use: Rare (< 10% transactions)

C. Forward Purchase Agreement (FPA)

Description: Buy plant under construction, with closing at future date (COD).

Advantages (for seller/developer):

• Capital secured before building
• Reduces construction risk (buyer often assumes cost overruns)

Advantages (for buyer):

• Price fixed before (can be discount vs secondary market)
• Control over technical specifications

Use: Common in plants > 50 MW with institutional buyers

6. Secondary market agents

Buyers (Buy-side)

Type	Typical Deal Size	Investment Horizon	Target IRR
Infrastructure funds	€50-500M	15-25 years	7-10%
Utilities (Iberdrola, Endesa, etc.)	€20-200M	Indefinite	8-12%
Family Offices	€5-50M	10-20 years	10-15%
Private Equity	€30-300M	5-7 years (exit)	15-20%
Listed Yieldcos	€50-300M	Indefinite	8-11%

Main funds active in Spain (2025-2026):

• Qualitas Energy
• Q-Energy
• Copenhagen Infrastructure Partners (CIP)
• Glennmont Partners
• AMP Capital
• PGGM

Sellers (Sell-side)

Profile	Sale Reason
Build-to-sell developers	Business model (capital rotates quickly)
PE funds in exit	End of investment period (5-7 years)
Companies refinancing	Liquidity need or divestment
Opportunistic investors	Take advantage of high market prices

M&A Advisors

Top advisors in Spain:

• Alantra (Solar M&A)
• EY Transaction Advisory
• PwC Deals
• Deloitte Financial Advisory
• Oaklins

Typical commissions: 1.5-3% of EV (decreasing scale by deal size)

7. Price trends 2023-2026

Multiple evolution

Year	Average EV/EBITDA	Average €/MWp	Comment
2021	10.5x	€750,000	Post-COVID boom
2022	12.0x	€850,000	Energy crisis → high pool prices
2023	13.5x	€950,000	Market peak
2024	11.0x	€880,000	Correction (pool normalization)
2025	9.5x	€820,000	Multiple compression
2026 (projection)	9.0x	€800,000	Stabilization

2023-2026 fall drivers:

1. Pool price normalization: From €80-100/MWh (2022) to €40-50/MWh (2025)
2. Rising interest rates: From 0% (2020-2021) to 4% (2023-2026) → higher WACC
3. Greater asset supply: 5 GW/year entering operation (buyer saturation)
4. Growing curtailment: Saturated zones (Extremadura, CLM) lose value

8. Real transaction cases

Case A: 300 MW Portfolio (2024, Extremadura)

Seller: Spanish developer (build-to-sell) Buyer: European infrastructure fund Assets: 6 plants (50 MW average each) Characteristics:

• COD: 2022-2023
• PPA: 10 years @ €42/MWh
• PR: 81-83%

Valuation:

• Total EV: €270M
• €/MWp: €900,000
• Annual EBITDA: €24M
• EV/EBITDA: 11.25x

Structure: Share deal, 100% payment at closing

Case B: 75 MW Plant (2025, Andalusia)

Seller: Spanish utility (divestment) Buyer: European Yieldco Characteristics:

• COD: 2020
• Merchant (no PPA)
• PR: 82.5%
• Curtailment history: 1.2%/year

Valuation:

• EV: €60M
• €/MWp: €800,000
• Annual EBITDA (3-year average): €8.5M
• EV/EBITDA: 7.05x

Structure: Share deal, €3M escrow (5%) for warranties for 18 months

Comment: Low multiple reflects spot market exposure (no PPA).

Case C: 15 MW Plant (2025, Castilla-La Mancha)

Seller: Family office Buyer: Private equity Characteristics:

• COD: 2018
• PPA expires in 2027 (2 years remaining)
• PR: 78% (low, historical inverter problems)
• Curtailment: 6%/year (saturated zone)

Valuation:

• EV: €9M
• €/MWp: €600,000 (low vs market)
• Annual EBITDA: €1.8M
• EV/EBITDA: 5.0x

Price adjustments:

• -15% for short PPA
• -10% for low PR
• -8% for high curtailment
• Total discount: -33% vs benchmark

Structure: €1.5M escrow for defective inverter replacement

9. Strategies to maximize value in sale

For sellers

1. Optimal timing

• Year 3-5 post-COD: Sufficient operational history to validate performance, but equipment still under warranty
• Before PPA expiration: If PPA expires in < 2 years, renegotiate before selling
• Avoid selling in Q4: Buyers usually have exhausted budgets (better Q1-Q2)

2. Pre-sale preparation (6-12 months before)

Action	Impact on Valuation
Renew O&M contract (if expiring soon)	+3-5%
Repair defective equipment (improve PR)	+5-10%
Obtain low curtailment certificate (from REE)	+3-5%
Renew land lease (if < 15 years)	+5-8%
Independent technical audit	+2-3% (credibility)

3. Asset marketing

• Professional teaser: Hire M&A advisor (commission recovers with surplus)
• Maximize competition: Minimum 5-7 buyers in process (generates price tension)
• Controlled auction: Better than bilateral (can raise price 10-15%)

For buyers

1. Risk analysis

• Confirm real history: Request full SCADA access (not just summaries)
• Validate capture price: Cross hourly production with OMIE prices (detect revenue inflation)
• Verify curtailment: Request REE emails/notifications (not just aggregate data)

2. Warranty negotiation

Critical warranties (seller responsibility post-closing):

Warranty	Typical Duration	Cap (Liability Limit)
Minimum production	2-3 years	10-20% of price
Minimum PR	2 years	5-10% of price
Absence of hidden defects	18 months	5% of price
Legal compliance	No time limit	100% of price

Strategy: Demand broad warranties if due diligence found red flags.

3. Escrow structuring

• Typical escrow: 5-10% of price retained 12-24 months
• Use: Cover warranty claims or necessary repairs

10. Conclusion: A mature market but with opportunities

The secondary market for photovoltaic plants in Spain has gone from being a niche (2015-2019) to a mature and liquid segment (2025-2026), with transactions of > €3,500M annually.

Key conclusions:

1. Multiples have compressed (from 13-14x in 2023 to 9-10x in 2026), but remain attractive for sellers who bought/built with low CAPEX
2. Long PPAs still rule: Valuation difference can be 3-5x EBITDA between merchant and PPA > 10 years
3. Due diligence is critical: Superficial DD can cost you 10-20% of value (hidden problems)
4. Timing is key: Selling in year 3-5 post-COD maximizes value (history + active warranties)

2026-2028 Projections:

• Transaction volume will remain (€3,000-4,000M/year)
• Multiples will stabilize at 8.5-10x for assets with PPA
• Plants with chronic curtailment will see growing discounts (up to -30%)
• Repowering will create new wave of transactions (2010-2015 plants with obsolete technology)

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