The global energy sector is undergoing an unprecedented transformation in 2025, marked by a radical shift in investment preferences: while photovoltaic power purchase agreements (PPAs) are losing appeal, battery storage is emerging as the standout technology of the moment.

The Decline of Traditional PV PPAs

The latest data reveal a concerning trend for the traditional photovoltaic PPA model. According to international financial analyses, leading investment institutions have downgraded residential solar energy stocks, anticipating a structural shift toward third-party ownership (TPO) models.

Experts at Magnus Commodities, a consultancy specialized in energy and decarbonization, explain that “industry analysts expect more than 90% of installations in 2026 to come from TPO models, compared to approximately 50% today.” This shift is being driven by the upcoming expiration of tax credits for cash purchases and loans at the end of 2025, which will significantly shrink that segment in 2026.

The impact is directly reflected in market valuations. Companies specializing in equipment for traditional installations are facing margin pressure, while those focused on energy-as-a-service models continue to show more favorable outlooks.

The Battery Storage Boom

While traditional PPAs face headwinds, battery storage is enjoying its golden moment. Industry sources confirm a 30% increase in battery sales compared to 2024, driven by the rise of residential self-consumption, growing demand for hybrid systems, and the need for grid stability.

The figures are striking: batteries now account for 30% of sales volume relative to photovoltaic modules—a proportion that would have been unthinkable just two years ago. This growth is complemented by a 15% increase in charging points and a 20% rise in solar carports, shaping a more diversified energy ecosystem.

Magnus Commodities highlights that “the convergence of storage, self-consumption, and electromobility is creating synergies that multiply the value of each technology, generating a network effect that accelerates the mass adoption of these solutions.”

The German Case: When Demand Exceeds Capacity

The situation in Germany perfectly illustrates the scale of the storage boom. German grid operators received 530 connection requests for storage systems totaling 204 gigawatts of capacity in the first four months of 2025 alone. This figure far exceeds the country’s planned storage capacity for 2045, which stands at 50 GW.

Official sources within the German electricity sector warn that “the number of grid connection requests for large-scale battery storage far exceeds realistic demand and available grid capacity.” This phenomenon has prompted operators to call for legislative intervention to curb what they describe as an “avalanche” of applications.

Economic Potential in Spain

Spain is not lagging behind in this storage revolution. The recent EBAFLEX study, conducted by the Institute for Energy Diversification and Saving (IDAE) in collaboration with specialized academic institutions, reveals striking figures regarding the economic potential of distributed storage.

According to the official report, deploying 6.4 GW of battery storage (5 GW centralized and 1.4 GW distributed), combined with a 20% demand response, would allow Spain’s national electricity system to save EUR 1.447 billion per year. In addition, annual savings of EUR 375 million would be generated in the distribution grid.

IDAE experts put these figures into context, noting that “six years ago, when the new regulatory framework for self-consumption was introduced, no one would have imagined that by 2025 we would have more than 8 GW of installed self-consumption capacity. Now it is time to open a new scenario that enables widespread penetration of distributed storage.”

Regulatory and Technological Drivers

The paradigm shift is not only economic, but also regulatory. Royal Decree-Law 7/2025, pending ratification, represents a major step forward for both standalone and hybrid storage. In parallel, Directive (EU) 2024/1711 explicitly recognizes storage as a valid energy source for “shared energy consumption.”

Magnus Commodities notes that “the European regulatory framework is evolving to recognize storage not merely as a complement to renewable generation, but as an independent asset that provides essential services to the electricity system.”

From a technological standpoint, the rapid decline in battery costs is accelerating adoption. Storage systems provide flexibility, grid stability, and the ability to bridge periods of low renewable generation, making them a cornerstone of the energy transition.

Market Outlook

Global projections confirm this upward trend. According to specialized market studies, the solar energy storage battery market is expected to grow from USD 6.39 billion in 2025 to USD 19.10 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 16.9%.

This growth contrasts sharply with the challenges facing traditional PPA models, particularly in mature markets where fiscal incentives are being gradually phased out.

Magnus Commodities analysts project that “storage will become the new gold of the energy sector, with multiple revenue streams including energy arbitrage, ancillary services, emergency backup, and self-consumption optimization.”

The year 2025 marks a turning point for the energy sector. While traditional photovoltaic PPAs are losing prominence due to regulatory and market changes, battery storage is consolidating its position as the technology of the future. This transition reflects not only technological evolution, but a fundamental shift in how energy is conceived and managed in an increasingly electrified and decentralized world.

The convergence of favorable regulatory frameworks, declining technology costs, and the growing need for flexibility in the electricity system positions storage as the catalyst for the next phase of the global energy transition.

Magnus Commodities