Spain solar power reduces wholesale electricity costs by 86 percent

The solar industry association UNEF reported that solar energy saved Spain an estimated €17.02 billion in wholesale electricity costs over an 18 month period. The group calculated that average day ahead electricity prices would have been 86 percent higher without solar power contributions.

The association attributed €14.23 billion of these savings to electricity generated by solar panels and another €2.79 billion to self consumption.

Solar power lowers market prices because panels have low operating costs and can replace more expensive gas fired generation. Data from the think tank Ember shows that gas affected the Spanish electricity market in only 9 percent of hours from January through May 2026, a drop from 52 percent in 2021. Renewable energy also reduced Spain's dependence on foreign fuels.

Between 2020 and 2024, wind and solar helped the country avoid approximately 918 billion cubic feet of gas imports, saving €13.5 billion. However, the grid operator Red Eléctrica reported that annual balancing costs rose from €1.3 billion in 2021 to €3.8 billion in 2025. During this same period, the amount of renewable electricity curtailed increased from 0.1 to 4.6 terawatt hours.

To manage these changes, neighboring Portugal is requiring large scale battery projects to provide grid forming capability and has opened a storage tender for 1 gigawatt. India also plans to address storage needs by setting a target of 206 gigawatt hours by 2030.