Boost to German solar expansion could increase times of negative power prices – business specialists

Germany’s most recent push to boost the rollout of solar photovoltaics (PV) in the country, which is set to be agreed upon in parliament on Friday (26 April), could result in significant power price drops, experts told business daily Handelsblatt. “The consequence could be that in times of high solar supply, electricity prices could fall sharply,” Alexander Weiss, energy expert at business consultancy McKinsey, told Handelsblatt, according to a report in Frankfurter Rundschau. The law, which is aimed to primarily benefit homeowners and renters, is likely to increase periods with negative prices as a result of plentiful solar power supply, said Christoph Bauer, professor of energy economics at TU Darmstadt.

During periods of negative power prices, large producers pay for their electricity to be fed into the network, and make a loss selling at negative prices, placing double costs on operators. Experts suggested a range of options for solving the issue: controlling grid feed-in from smaller photovoltaic systems, which made up the majority of new installations in 2023; creating more incentives to increase demand when a lot of green electricity is available; and making demand more flexible, with private households running their washing machines, for example, when there is a lot of sunshine at midday. 

The new measures laid out in the 'solar package' aim to remove red tape slowing solar expansion. Measures include increasing subsidies for solar PV with an output of more than 40 kilowatts by 1.5 cents per kilowatt hour, and making more land available for solar PV parks. Still, the industry is supportive of the package as the government’s aim of achieving a total solar power capacity of 215 GW by 2030 (400 GW 2040).