Solar overtakes wind as Spain's top annual power source

Solar now generates more annual electricity than wind in Spain

Photovoltaic power has overtaken wind as Spain's leading source of annual electricity generation. The milestone comes after six or seven years of massive panel installation which, according to industry figures, has exceeded even the most optimistic forecasts. Europe's sunniest country is finally turning that advantage into a measurable fact in its energy mix.

The headline is undeniable. The question is what can be done with it. Because the same system that celebrates solar leadership keeps showing wholesale prices that are not falling as fast as the installed capacity would suggest: there are days with a solar predominance when the forecast average price exceeds that of days with a heavier gas weighting. The paradox is not a small one.

Storage, the piece that still doesn't fit

Massive battery installation has begun, but its volume remains residual. The figures circulating speak of a few hundred megawatt hours, a capacity not enough to shift the midday surplus to hours of demand. Without that buffer, solar output is wasted at peak times and the system still relies on other sources to cover the afternoon and night.

Some argue the solution lies in closed-loop pumped hydro storage, capable of accumulating potential energy at large scale. Something is being done, but little. The result is generation capacity that is thrown away in the central hours while consumers pay the highest electricity prices in the hours without sun.

Why is electricity still expensive with more renewables?

Because the wholesale price is not set only by the cheapest source. The marginal pricing market pays all electricity at the price of the last technology needed to meet demand, and that technology remains, in many hours, the gas combined cycle. More solar cheapens the central hours, but not necessarily the daily average.

On top of that comes the structure of the bill. A significant part of what consumers pay is not energy: it is grid fees, system charges and taxes. The energy actually consumed may be half or less of the total billed. Cutting the wholesale price does not reduce the bill in the same proportion, and that mismatch fuels the feeling that the renewable rollout is not reaching people's pockets.

The business of selling solar panels, in trouble

Not everyone in the sector is celebrating the milestone. Companies selling electricity from photovoltaic installations face very low feed-in prices, to the point that in some hours production is remunerated at zero or even requires paying to export it. The small producer's business model, which relied on recouping the investment by selling surpluses, suffers when everyone's production is concentrated in the same hours.

The generation fleet has grown faster than the capacity to absorb it. That is the flip side of success: installed capacity is one figure, the profitability of that capacity is another.

Connections, grid and the industry's bottleneck

The rollout also runs into the grid. New connections are not keeping pace with installations, and node saturation limits evacuation in high-production areas. The result is a system that generates a lot where it is not always consumed and cannot always transport it.

The point where the analysis gets stuck is the usual one: the generation race has been won, but not the race for storage, the grid or remuneration. The sun is already the leading source. What is missing is for that to show.