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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.