The gold-rush mood is over: solar and wind farms are becoming a loss business
In Germany, the gold-rush atmosphere for solar and wind farms has been over since 2025. Falling electricity prices are depressing revenues, while interest rates and construction costs are rising. At the same time, long grid connection waiting times slow down projects, which is why budgets and schedules are shifting. In addition, a draft bill to amend the Energy Industry Act (EnWG) is causing unrest because new plants are no longer to receive compensation in the event of curtailments due to grid overload and could thus become a loss (handelsblatt: 20.02.26).
Gold rush mood ends in cost shock – solar parks hardly pay off anymore
The industry came from years of high profits, but the calculation is now tipping quickly. A few years ago, the LCOE (Levelized Costs of Electricity) – i.e. the total electricity generation costs of a plant over its lifetime – were 3.5 to four cents per kilowatt hour. Developers are currently reporting five cents and more, while the revenue side is not keeping pace. The EEG remuneration for large photovoltaic parks was 5.23 cents in 2025, and direct electricity supply contracts are also significantly lower in some cases, according to Eneritis. This means that new investments quickly become negative business.
In Germany, the gold-rush atmosphere for solar and wind farms has been over since 2025. Falling electricity prices are depressing revenues, while interest rates and construction costs are rising. At the same time, long grid connection waiting times slow down projects, which is why budgets and schedules are shifting. In addition, a draft bill to amend the Energy Industry Act (EnWG) is causing unrest because new plants are no longer to receive compensation in the event of curtailments due to grid overload and could thus become a loss (handelsblatt: 20.02.26).
Gold rush mood ends in cost shock – solar parks hardly pay off anymore
The industry came from years of high profits, but the calculation is now tipping quickly. A few years ago, the LCOE (Levelized Costs of Electricity) – i.e. the total electricity generation costs of a plant over its lifetime – were 3.5 to four cents per kilowatt hour. Developers are currently reporting five cents and more, while the revenue side is not keeping pace. The EEG remuneration for large photovoltaic parks was 5.23 cents in 2025, and direct electricity supply contracts are also significantly lower in some cases, according to Eneritis. This means that new investments quickly become negative business.
It's a dilemma for Ed Miliband, as even he must take note of what is happening elsewhere in the world. For example we have this from the same source -
China to connect 52 new coal-fired power plants to the grid – largest expansion in a decade in 2025
China pushed ahead with the expansion of coal-fired power in 2025 and commissioned 52 large units (≥1 GW each). This is shown by the CREA/Global Energy Monitor report. It is the highest figure in ten years, in which fewer than 20 such large units were connected to the grid. The trigger was the power shortages in 2021 and 2022, when factories had to cut production and a city introduced rolling shutdowns. Beijing therefore took advantage of security of supply through the massive expansion of coal-fired power plants. The consequences range from more stable industrial electricity to higher climate risks, because new coal-fired units later achieve long service lives.
4 comments:
Not Zero.
As Einstein might have said, "Only two things are infinite; the Universe and Ed Miliband's capacity not to notice the obvious. But I'm not sure about the Universe."
Religions are a matter of faith, not of facts or truth.
HAA HAA! Now for the perambulating time bombs -- aka electric vehicles . . .
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