Solar Power Generation Sets Record, Marking Milestone in EU Energy Structure
In June, the European Union generated 52 terawatt-hours (TWh) of solar power, representing 25% of its total monthly electricity supply for the first time and signaling a new phase in the EU’s energy structure. Data from energy think tank Ember showed that this was the first time in EU history that solar power accounted for more than a quarter of monthly electricity generation. In key markets such as Germany, Spain, and France, solar power exceeded 50% of midday electricity generation during sunny periods.
The significant increase in solar power’s share was primarily driven by a roughly 60% decline in solar module prices since 2020, coupled with government incentives such as feed-in tariffs and tax benefits that spurred rapid growth in solar installations. In 2025, the EU added 65.1 gigawatts (GW) of solar capacity, a slight 0.7% decline from 2024 and the first annual contraction since 2016, though the overall scale remained substantial. That same year, combined wind and solar power generation surpassed fossil fuels for the first time, accounting for 30% of the EU’s total electricity generation and becoming the largest source of power.
Lagging Energy Storage and Grid Development Lead to Curtailment and Negative Prices
Despite record-high solar power generation, the expansion of energy storage and grid infrastructure has failed to keep pace with growth in generation capacity. In the first half of 2026, solar power curtailment due to grid constraints in several EU countries more than doubled compared to the same period in 2025, with curtailment particularly severe in May and June. Data from the German Federal Network Agency showed that only about 40% of planned grid upgrades for 2026 were completed, highlighting a significant lag in infrastructure investment.
A report by SolarPower Europe indicated that Europe added approximately 10 GW of energy storage capacity in 2025, while solar installations grew by nearly 60 GW during the same period, with storage growth far outpaced by solar. The EU’s current energy storage capacity stands at around 55 GW, but to meet 2030 targets, it must expand to approximately 200 GW, leaving a gap of 145 GW. Michael Waldner, CEO of Zurich-based renewable energy consultancy Pexapark, stated that the market urgently requires more storage capacity to address the intermittency of solar power.
In June 2026, the EU signed its first tripartite energy storage agreement, pledging to add 30 to 35 GW of storage capacity by 2028. However, the agreement is viewed as a short-term, non-binding transitional solution, with its long-term effectiveness remaining uncertain. The European Commission had previously warned that without accelerated grid upgrades, the EU may fail to meet its 2030 renewable energy targets, estimating an annual investment need of €58.4 billion for grid strengthening.
Frequent Negative Electricity Prices Impact Power Producer Revenues
The intermittency of solar power, combined with relatively low midday electricity demand, has led to frequent negative prices in the spot market. In the second quarter of 2026, the number of negative electricity price hours in Germany, Spain, and the Netherlands increased by more than 30% compared to the same period in 2025, severely eroding revenues for power producers without storage facilities or long-term power purchase agreements. The Spanish government’s plan to impose a windfall tax on excess power generation has further increased investment risks, raising concerns among external observers about whether Spain’s solar market is transitioning from growth to decline.
In 2025, the EU experienced its first annual decline in solar installations since 2016, with the residential solar market cooling rapidly following the phase-out of subsidy policies, underscoring the significant impact of policy adjustments on market momentum. As solar power generation continues to grow, businesses and investors are placing greater emphasis on the necessity of energy storage and long-term power purchase agreements. Whether the EU can close the investment gap in storage and grid infrastructure by 2030 will determine whether solar power can evolve from a leading generation source into a stable and reliable energy pillar, a focal point for stakeholders across the sector.
