Solar capture rates in the NEM: where they are, how they're calculated, why they've fallen
Solar capture rates in the NEM: where they are, how they're calculated, why they've fallen
Utility-scale solar assets in the NEM now earn just 33% of the day's average wholesale price, down from 51% three years ago. Three years of aggressive solar build-out, from both rooftop and utility-scale, have saturated midday demand and compressed capture rates and solar-hour prices. Average earnings were $25/MWh over the last twelve months.
Some of that headline decline is recovered. Solar assets that dispatch through negative-price intervals are typically doing so because a PPA or LGC pays for the volume even when the spot market doesn't. Forgiving those negative-dispatch losses lifts the NEM-wide capture rate 5 percentage points, to 38%.
A breakdown of capture rates reveals the mechanisms working against solar farms in the NEM. This means separating out the structural forces with the greatest impact: time-of-day shape, negative-price dispatch, curtailment, and Marginal Loss Factor (MLF) deterioration. These insights inform hybrid configuration choices that can lift a project's value.
This piece sets out what a solar capture rate is and how Modo Energy calculates it. Then, where capture rates sit today across the four mainland regions, and what's driving the compression.
Executive Summary
- NEM volume-weighted solar capture rates over the last twelve months were 32% of 24-hour RRP. Time-of-day price shape accounts for almost two-thirds of the lost revenue NEM-wide.
- The four mainland regions cluster in a 27% to 37% capture rate band, with Queensland the lowest.
- Removing dispatch during negative pricing, which is largely driven by maintained earnings from PPAs and LGCs, this range lifts to 34% to 41%.
- Large-scale Generation Certificate (LGC) prices have fallen from $55/MWh in 2022 to less than $3/MWh in 2026, removing the previous offset for negative-pricing intervals.
- Rooftop solar capacity has almost doubled since 2022, reducing midday demand. Negative-price intervals in solar hours have also doubled over the same time period.
How solar capture rates are calculated
A capture rate compares the capture price, the volume-weighted average wholesale spot price a solar generator receives, against a standard for what it could have earned.
Modo Energy expresses solar capture in two ways. Both use the same capture price as the numerator, but compare against different reference prices:
