Solar power is no longer a marginal technology in European electricity markets. It is now one of the main forces reshaping wholesale price formation. South East Europe is one of the regions where this shift will be most visible.
Across the EU, 2025 marked a structural milestone. 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.
For South East Europe, this trend is especially important. The region has strong solar irradiation, rising air-conditioning demand, growing renewable pipelines and still-limited storage penetration. Greece, Bulgaria, Romania, Hungary and Serbia are all exposed to a new daily price shape: low or negative prices during sunny midday hours, followed by higher prices in the evening.
This is the classic “duck curve” problem. Solar output rises quickly during the morning and reaches its peak around midday. At that moment, wholesale prices can fall sharply because the system has a high volume of low-marginal-cost electricity. But as the sun sets, solar generation drops. If demand remains high and flexible resources are limited, prices can rise quickly.
That pattern is already visible in South East Europe. ACER identified the lack of flexible resources to replace solar generation in the evening as a key driver of the region’s 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.
This matters for solar project economics. A solar plant does not earn the annual baseload price. It earns the price available during the hours when it produces. As more solar enters the system, solar plants increasingly compete with one another during the same hours. That pushes down the solar capture price.
This is why solar cannibalization is becoming a central issue. The first wave of solar benefits from high daytime prices. Later waves reduce the value of those same daytime hours. The result is a paradox: more solar is good for decarbonization and consumer prices during sunny hours, but it can weaken the merchant business case for standalone solar projects.
SolarPower Europe has already warned that negative prices and curtailment are eroding business cases in the EU solar sector. The group reported that the EU installed 65.1 GW of new solar PV in 2025, slightly below the 65.6 GW installed in 2024, marking the first annual decline since 2016.
South East Europe should read that warning carefully. The region is not “finished” with solar. Far from it. Solar will remain one of the fastest and cheapest sources of new electricity. But the commercial model must evolve.
Standalone solar exposed entirely to merchant prices will become riskier as negative-price hours increase. Solar projects with batteries, flexible offtake, corporate PPAs, curtailment protection or intraday optimization will be better positioned. Industrial consumers that can shift load into midday hours may also benefit from lower daytime prices.
There is also a grid dimension. Solar growth can happen faster than transmission reinforcement. When grid capacity is limited, renewable output can become trapped in specific areas. That creates local congestion, curtailment and price separation. In South East Europe, where interconnection and internal grid constraints are already major issues, solar deployment must be matched with network investment.
The political message is equally important. Policymakers should not interpret negative prices as proof that too much renewable energy has been built. Negative prices are proof that the system lacks enough flexibility to absorb renewable output efficiently. The solution is not to stop solar. The solution is to build storage, demand response, grid capacity and more granular market signals.
Solar is rewriting the rules of South East European power markets. The winners will not simply be the companies that build the most capacity. The winners will be those that understand when their electricity is valuable, when it is not, and how to move value from surplus hours to scarcity hours.
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