The profitability of solar parks in Europe has plummeted to its lowest level ever, challenging the business model of solar energy, according to experts.
The situation is most pronounced in Spain, where the capture rate—the income generated by solar panels compared to the average market price for electricity—dropped to just 7% in May, down from 43% a year ago.
Europe is seeing an increase in solar parks, and a sunny spring has led to record electricity generation. However, this surplus supply is weighing on profits and deterring investors, particularly in Spain and France, where the capture rate stands at 13%.
In contrast, Belgium reported a capture rate of 55.6% last year, according to a study by the federal energy regulator, CREG. The energy watchdog warned that negative prices could strain the profitability of both existing and new installations.
Analysts share this concern. Nathalie Geri, an analyst at the London Stock Exchange Group, stated, “The greatest risk with the expansion of renewable energy is the declining profitability of the solar sector. Lower capture rates undermine the solar energy business model.”
