Spain’s solar is too cheap for investors

The country has too much power on sunny days ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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Is there such a thing as too much solar? Today’s newsletter looks at Spain’s oversupplied solar sector, which has delivered cheap power for millions of Spaniards — but has investors looking for a quick exit. Meanwhile, the UK could miss its clean energy target by five years because of capacity constraints in its grid. Subscribe to Bloomberg.com for unlimited access to all our coverage. Investors want out of Spanish solar By Thomas Gualtieri, Eamon Farhat, and Clara Hernanz Lizarraga Over the past 15 years, Spain has been one of Europe’s fastest-growing renewable-energy markets, with venture capitalists, utilities and banks plowing more than $80 billion into the sector. But that surge in investment has created a glut of electricity so large that solar parks are plummeting in value and investors are looking for an exit. So much solar capacity was added last year that it flooded the grid, pushing prices deep below zero during peak times as producers cut rates to off-load excess power. Only six months into the year, the country has already surpassed its annual record for the number of hours when producers must pay users to take their electricity. The problem is happening across Europe, but it’s most dramatic in Spain, where solar last year overtook wind as the largest source of electricity. “The economics have deteriorated so sharply that investors are trying to exit at steep discounts,” says Daniel Pérez, head of L’Energètica, a utility in the Catalonia region. A worker installs a solar panel near Zaragoza, Spain. Photographer: Angel Garcia/Bloomberg At least four Spanish projects or companies have been offered for sale, according to people familiar with the matter. Arena Green Power SL and Matrix Renewables have been shopped around, the people say, asking not to be named discussing private processes. Both companies declined to comment. Privately held RIC Sun España SL was on the market, but the company says that’s been shelved as it works to add batteries to its parks. The gap between the expectations of sellers and buyers has grown so big that transactions have slowed significantly, according to Alvarez & Marsal Valuation Services in Madrid. Iberdrola SA, Europe’s biggest green-power producer, has delayed some asset sales after getting what it considers lowball offers from potential buyers, two of the people say. Iberdrola declined to comment. Short sellers are circling. BlackRock Advisors LLC and at least four other big firms have opened up sizable short positions (a bet that a stock will fall) in Solaria Energia y Medio Ambiente SA. The company’s solar output jumped by almost half in the first three months of this year, though the average price for its solar power fell one-fifth over the same period. Solaria declined to comment, but it has said that to diversify its business, it has raised €300 million ($342 million) to buy batteries to effectively stockpile excess electricity during peak hours. And it’s considering building data centers to move beyond simple generation — and provide a ready buyer for its power. Solar panels in Barcelona. Photographer: Angel Garcia/Bloomberg The problem has worsened since a blackout in April 2025 that plunged most of Spain and Portugal into darkness. Since then, Spain’s national grid operator, Red Eléctrica, has been more aggressive in ordering farms offline, because solar complicates network management. Power systems require stability in both frequency (the grid’s rhythm) and voltage (the electrical pressure that keeps power flowing reliably). Traditionally, large spinning turbines helped maintain this balance, but solar is more prone to sudden shifts in supply and demand and requires more active control. For many Spanish consumers, the glut is a blessing, because the price they pay for power is linked to what producers get on the wholesale market. This year their rates have been among the lowest in Europe — about half of what Germans pay. But the surge in output has stirred a debate over how grids can adapt to the dramatic rise in renewable generation capacity. Although some investors are shying away from the sector, it could become a “sweet spot” for funds that take stakes in troubled companies and try to turn them around, says Luis del Barrio, who leads the energy consulting practice in Madrid at Arthur D. Little Inc. “You’re looking at between €6 and €10 billion in equity” to buy struggling assets, he says. “Plus about €10 billion of investment in batteries to save the sector.” Read more Beyond solar 55,000 MW Brookfield’s development pipeline of storage capacity globally, from current 3,100 MW. The firm expects batteries to play a central role as power becomes extremely cheap in the middle hours of the day Storage solution Companies “want the ability to hedge themselves when prices are high during the evening peaks, and storage coupled to renewables provide that.” Arnaud Jouvin Head of Brookfield’s global energy storage strategy Grid woes weigh on UK climate goals By Eamon Farhat The UK will probably miss its clean electricity target by five years because of capacity constraints on its grid and could struggle to deliver on promises to cut household energy bills, according to consultant LCP Delta. About 83% of all power should come from clean sources by 2030, short of the government’s goal of 95%, with that milestone now unlikely to be hit until 2035, LCP Delta said in a report. A huge amount of renewable energy — enough to power millions of homes — is set to be lost because it can’t flow to where it’s needed, prompting gas-fired plants to be turned up to fill the gap. The warning underscores one of the biggest challenges facing Britain’s energy transition. While renewables output is rapidly expanding, there hasn’t been enough investment in the network to handle the extra flows and insufficient battery capacity to store excess power. That’s limiting how much electricity can actually be used and making it harder to curb fossil-fuel use and lower consumers’ bills. Get full coverage This week’s Zero listen Zero Solar, Batteries Are Thriving in Trump's America The common narrative is that the US renewables industry is struggling. But that’s not the case for the whole sector. This week on Zero, Akshat Rathi talks with Kevin Smith, chief executive officer of Cypress Creek Energy, which recently secured $3.5 billion in financing to build one of the biggest solar and battery projects in the US. Even as the current American administration dismantles clean-energy policies, Smith sees a bright future for solar and batteries. Listen now, and subscribe on Apple, Spotify or YouTube to get new episodes of Zero every Thursday. More from Green World Bank scraps climate financing targets The World Bank decided to remove quantitative targets for incorporating climate objectives into its financing, months after criticism from the US — its biggest shareholder — that it should get back to focusing on economic development. Read more Photo finish Farmers at a flooded paddy field in India in 2024. Photographer: Indranil Aditya/Bloomberg India’s monsoon season had an unusually weak start as the El Niño weather phenomenon curbed rains. The country had recorded a 40% rainfall deficit by mid-June. But ample rain forecast for early July could help India’s farmers as the busiest sowing period for key crops approaches. If the forecast holds, the rainfall could help rice, soybean, cotton and pulse farmers boost sowing, reducing risks to crop output, food inflation and rural incomes. 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