Solar plants generate electricity at the same time, pushing down prices as supply reaches the market. Demand, contracts and the rest of the generation mix determine how far those prices fall.

In "European Solar Outlook: Negative Prices, Capture Rates and Co-location", Till Stehr and Pablo Martínez explore what this means for owners and how batteries, trackers and grid access can improve returns.

Spain has the most negative-price hours of the markets we track, but the shallowest prices

Spain has the most negative-price hours in our comparison, but prices rarely fall far below zero. Many solar power purchase agreements (PPAs) stop paying in those hours, so plants reduce output rather than pay to keep generating.

In Germany, some older subsidies reward continued production, while parts of the rooftop fleet do not respond to prices. More generation stays online, pushing prices further below zero. The difference is about incentives and flexibility as well as the amount of solar installed.

Weather also shaped Spain's result. A wet spring brought more hydro generation, pushing prices down earlier in the year. The gap with other markets did not keep widening through summer, as higher demand helped absorb solar output.

How much of a solar plant's output falls in negative-price hours?

In Spain, the main risk is losing sales during the hours when plants produce most. With a virtual asset in the south of Spain, 21% of potential output fell in negative-price hours over the 12 months to October.

Turning off in those hours improves the average price a plant earns, but leaves it selling less electricity. Capture prices therefore need to be read alongside volumes and total revenue.

The same applies to PPAs: our €40/MWh example paid only €33 per MWh of potential output once negative-price hours were excluded. The headline contract price does not tell owners how much production will be paid for. This matters most in spring, when long periods of slightly negative prices can exclude a substantial share of production from payment.

Why does Spanish solar capture the least of the four markets in our outlook?

Spain already supplies a large share of daytime demand with solar. The pressure is greatest in spring, when production is strong but air-conditioning demand has yet to rise. The rise in summer demand then helps absorb more output and support prices. Germany sees less of this seasonal increase in demand, so additional summer production faces more competition.

Higher gas prices in 2026 have also helped lift solar earnings, as the average price of electricity has increased across Europe. That benefit comes in hours when gas is still needed to meet demand and sets the electricity price. When solar is already pushing prices towards zero, higher gas prices offer little support.