Spain’s renewable energy market faces valuation slump, study says

The rapid expansion of renewable energy in Spain, particularly solar power, is beginning to weigh on the market as lower electricity prices drive a sharp decline in project valuations, according to a new report by global advisory firm Alvarez & Marsal, cited by Bloomberg.

The firm revealed that valuations for early-stage clean energy projects — particularly ready-to-build ones — have dropped by more than 60% between 2021 and 2023. These assets are now valued between €50,000 and €90,000 ($58,000–$105,000) per megawatt.

Surging solar output has pushed wholesale electricity prices in Spain to historic lows, frequently dipping below zero. In the first nine months of 2025, the number of hours with negative electricity prices exceeded 500 — almost double the total recorded in 2024.

“An excess of installed capacity, weaker-than-expected power demand and a gradual erosion of prices are bringing into question the profitability of numerous projects,” Alvarez & Marsal stated in the report, published on October 20.

Although Europe’s clean energy mergers and acquisitions (M&A) activity grew by nearly a third in the year through June 2025, Spain bucked the trend. M&A volumes in the country fell by 10%, even as the overall value of deals surged by 60%, driven by a handful of high-profile transactions.

The report notes that the current challenges are the result of the sector’s own success. The rapid deployment of solar photovoltaic installations has led to a supply glut and downward pressure on market prices.

The average revenue earned by solar producers — known as the "solar captured price" — fell by 22% to €45 per megawatt-hour, reflecting the impact of increased generation and market saturation.

By Sabina Mammadli