In 2025, Ember reported that wind and solar generated 30% of EU electricity, overtaking fossil fuels at 29% for the first time. Solar alone supplied 13% of EU electricity and grew by more than 20% year-on-year for the fourth consecutive year. These figures point to a structural shift in generation mixes affecting wholesale price formation.
South East Europe is highlighted as one of the regions where the change is most visible. The area has strong solar irradiation, rising air-conditioning demand, growing renewable pipelines, and still-limited storage penetration. Greece, Bulgaria, Romania, Hungary and Serbia are described as facing a daily price pattern linked to solar output.
Midday negative prices and evening price increases
The new daily shape in the region features low or negative prices during sunny midday hours, followed by higher prices in the evening. This pattern is associated with solar output that rises quickly in the morning and reaches its peak around midday. As solar generation falls after sunset, prices can increase when demand remains high.
The mechanism is described as a “duck curve” effect. During periods when system supply includes high volumes of low-marginal-cost electricity, wholesale prices can fall sharply. When flexible resources are limited and demand stays elevated, prices can rise quickly in the evening.
ACER identified a lack of flexible resources to replace solar generation in the evening as a key driver of 2024 summer price spikes. The agency also found that limited cross-border capacity made it harder for South East Europe to import lower-priced electricity from elsewhere during stress periods. Together, these factors are tied to the observed timing of price movements.
Implications for solar capture prices and cannibalization
The economics of solar projects are linked to hourly market prices rather than an annual baseload level. A solar plant earns the price available during the hours when it produces. As more solar enters the system, plants increasingly compete during the same production hours.
This dynamic is reflected in lower solar capture prices as additional capacity increases overlap in generation timing. The issue is described as “solar cannibalization,” where earlier additions benefit from higher daytime prices while later waves reduce the value of those same hours. The source material frames this as affecting merchant business cases for standalone projects.
SolarPower Europe warned that negative prices and curtailment are eroding business cases in the EU solar sector. The group reported EU installations of 65.1 GW of new solar PV in 2025, slightly below 65.6 GW installed in 2024. It also marked the first annual decline since 2016.
Project structures and demand flexibility
The material says South East Europe is not “finished” with solar, while noting that commercial models must evolve. It states that standalone solar exposed entirely to merchant prices will become riskier as negative-price hours increase. It also points to project configurations intended to mitigate exposure to those hours.
The options listed include solar projects with batteries, flexible offtake arrangements, corporate PPAs, curtailment protection, or intraday optimization . Industrial consumers able to shift load into midday hours may also benefit from lower daytime prices. These measures are presented as ways to change how value aligns with production profiles.
Grid constraints, congestion and market separation
A grid dimension is also described alongside market timing effects. Solar growth can occur faster than transmission reinforcement, which can lead to renewable output becoming trapped in specific areas when grid capacity is limited. That situation can produce local congestion, curtailment, and price separation.
The source material links this to interconnection and internal grid constraints already being major issues in South East Europe . It states that solar deployment must be matched with network investment under those conditions. The emphasis is on aligning capacity additions with transmission and internal network capability.
Policy stance on negative prices
The political message in the source material cautions against interpreting negative prices as proof that too much renewable energy has been built. It instead describes negative prices as indicating a system lacking enough flexibility to absorb renewable output efficiently . The stated solution is not stopping solar but improving flexibility and market operation.
The measures listed include building storage, developing demand response, expanding grid capacity, and using more granular market signals . In this framing, these steps address both absorption constraints during surplus periods and replacement needs during scarcity periods. The focus remains on how operational flexibility affects price outcomes.
The final section states that “solar is rewriting the rules” of power markets in South East Europe. It says winners will not be determined only by companies building the most capacity. It specifies that performance depends on understanding when electricity is valuable or not and how value moves from surplus hours to scarcity hours.
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