The Spanish photovoltaic market no longer faces only the challenge of installing more capacity. Now, the main challenge is to maintain the economic viability of projects until electricity demand grows at the rate the sector anticipates.
That is the diagnosis made by José Donoso, general director of the Spanish Photovoltaic Union (UNEF) , who believes that the industry is going through a transition period marked by zero prices, negative prices and PPAs that no longer offer the financial conditions that boosted growth in recent years.
"Right now the market is demanding photovoltaic projects with storage. PPAs without storage are very difficult," Donoso stated in an interview with Energía Estratégica .
The reflection comes just two weeks after Iberdrola and Statkraft warned that the profitability of solar energy will no longer depend exclusively on producing more megawatts and will instead be built through storage, ancillary services and more sophisticated energy products.
For UNEF, that transformation has already begun.
The change is no longer solely a technological issue, but a financial one.
Current captured and contracting price levels make it difficult to finance new photovoltaic-only plants, while projects incorporating storage offer more valuable supply profiles for the electricity system.
"The market is demanding photovoltaic projects with storage because they provide a solution both during off-peak hours and peak hours. In these situations, storage for four to six hours becomes a fundamental element," Donoso stated.
The approach is consistent with the evolution that the market has been observing.
While numerous standalone solar PPAs are being traded around 27-30 euros/MWh , hybrid contracts are already exceeding 40 euros/MWh , while tolling agreements for BESS systems are gaining prominence.
A financial "bridge" until the new demand arrives
However, for UNEF, the problem doesn't end with project design. The employers' association believes there is a temporary mismatch between the strong growth in renewable energy generation and electricity demand that has not yet kept pace.
"We have an impressive demand for funds, but it will take three or four years to materialize. During that time, we need instruments that allow us to finance the projects, especially debt service," Donoso explained.
For this reason, UNEF proposes the creation of specific lines of credit from the Official Credit Institute (ICO) that would allow for the financial support of assets during this transition period.
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The organization also calls for other regulatory measures, such as compensation for technical discharges when network limitations prevent the evacuation of generated energy.
"If Red Eléctrica has not yet found a solution, the logical thing is that these technical discharges should be compensated, as happens in other European countries," he said.
These measures are complemented by the positive assessment of the gradual elimination of the 7% tax on electricity generation, recently approved by the Government.
The problem is not that there is too much photovoltaics
Despite the current scenario of depressed prices, Donoso rejects the idea that Spain has installed too much solar generation.
His diagnosis points in another direction.
"We have made great progress in decarbonizing the electricity sector, but we have not progressed at the same pace in electrifying end-user consumption. That is where the real delay lies," he says.
Added to this is the delay in the regulatory development of storage, especially for plant hybridization, a tool that the sector had been demanding for years.
As a result, there is currently a temporary excess of supply relative to demand.
But UNEF believes that this balance could be reversed in a few years.
As Donoso recalls, there are currently 43 GW of demand connection points already granted , in addition to new distribution projects and other applications in process mainly linked to industrial processes, electrification and data centers.
"We are probably facing one of the greatest industrial revolutions in the history of Spain. If this demand develops, in three or four years we could even find ourselves with a problem of excess demand," he argues.
While that scenario is still unfolding, the priority lies elsewhere.
"Now the sector's priority is to invest in storage, better manage assets, and develop ancillary markets to be prepared for that moment," he concludes.