However, the country’s spectacular rate of solar expansion has complicated the outlook for the economics of photovoltaic projects, as the immense solar capacity generates high levels of price cannibalization.
As a result, solar developers in the country are offering extremely competitive prices for solar agreements, with prices having fallen by 13.5% year-on-year. These remarkably low figures, in the range of €30-32/MWh, are below the levels recorded in 2021, just after the pandemic, and are even more remarkable considering the inflation recorded in recent years.
That said, solar PPAs continue to be signed in Spain. Counterparties are turning to contractual approaches as they modify settlement structures to protect themselves against downside market risks. Furthermore, a significant volume of BESS development is coming to the rescue of hard-to-sell solar assets, helping to sustain project economics and distribute energy delivery during hours less affected by daytime cannibalization.
Respondo AS