* European PV market set for M&A breakthrough
* Q1 power, renewables deals value fell 70 pct year on year
* Every third global power deal struck in Europe
LONDON, May 7 (Reuters) - Europe's solar power market is expected to drive a rebound in activity in the region's renewable energy mergers and acquisitions (M&A) sector in the second quarter, consultancy PwC said in a report on Monday.
A steep drop in module prices is expected to accelerate demand, making the sector an attractive long-term investment opportunity set to revive power market M&A after a weak start to the year, PwC said.
Foreign buyers have already started snatching up distressed European solar manufacturers, such as Germany's Solon and Swiss Oerlikon.
"Looking ahead, solar PV looks set to breakthrough and feature more prominently in renewables deal flow," PwC said in its quarterly report about European power and renewables deals.
Deal value in Europe's overall sector fell 70 percent year on year in the first quarter to $5.4 billion, reflecting uncertainty about the eurozone debt crisis and difficulties for dealmakers to secure financing.
But globally, every third deal in the sector was made in Europe, with 68 agreements struck in the area, compared with 95 seen at the same time last year.
In the traditional power sector, government asset privatisation in Ireland, Greece and Spain will provide further opportunities for M&A deals in the electricity market.
Ireland's sale of selected Bord Gais and ESB assets and Greece's privatisation of gas company DEPA and gas grid operator DESFA are some of the highlights in Europe's power M&A pipeline this quarter, PwC said.
Looking at the investor side, insurers, infrastructure funds and other financial investment entities are emerging as bidders for European power assets.
Notably, the sale of E.ON's gas transmission network, which is expected to lure bids of up to $3.3 bln, has attracted a number of insurers in various consortiums.