Germany is set for the first reduction in hours of negative electricity prices in four years

Germany is moving toward its first reduction in four years of hours with negative wholesale electricity prices. This is happening despite the rapid expansion of solar generation and a new record of electricity production from photovoltaic plants.

According to Bloomberg, from the beginning of 2026 until September 27, Germany recorded 463 hours with negative prices for electricity. During the same period last year, there were 511.

Negative prices occur when electricity supply so exceeds demand that producers effectively have to pay to continue delivering electricity to the grid. This situation has become increasingly common in Europe due to the rapid build-out of solar and wind capacity without equally fast development of storage, grids, and demand response.

Analytics company Kpler expects that for the whole of 2026, the number of hours with negative prices in Germany will decrease by about 13% compared to last year.

The number of such periods declined particularly noticeably in May and June. According to Kpler, heat waves that increased power consumption were one of the reasons, while weaker wind generation reduced excess supply.

From May to July, electricity consumption in Germany was about 10% higher than in the same period of 2025.

Changes in the renewable energy support system also affected the situation. Some solar plants no longer receive subsidies during periods of negative exchange prices. This gives operators an incentive to curtail production instead of continuing to generate amid a significant surplus of electricity.

At the same time, Germany's solar power keeps setting records. By the end of September, the country had already produced more solar electricity than in all of 2025. Thus, the decrease in hours with negative prices is happening not because of a drop in renewable generation, but against the backdrop of changing relationships between production, demand, and market rules.

The Fraunhofer ISE institute previously noted that in the first half of 2026, Germany's solar plants delivered a record 43.2 TWh to the public grid. However, the institute warned that the country still lacks storage capacity that would allow the excess cheap electricity to be shifted to hours of high demand.

The situation in other major European power systems is moving in the opposite direction. Spain in 2026 has already recorded 703 hours with negative prices – 31% more than a year earlier. High solar generation and significant water reserves in hydroelectric reservoirs are simultaneously putting pressure on the market there.

In France, the number of hours with negative prices increased from 493 to 520. Analysts cite increased solar capacity and higher nuclear generation availability among the reasons.

Despite the decline in Germany, 463 hours of negative prices remain a historically high figure. For European energy, this demonstrates the need to develop batteries, cross-border interconnections, and flexible demand faster in order to use excess generation instead of forcing its curtailment.