Electricity Prices Plunge as Scorching Heat Brings a Mixed Blessing
The large-scale construction of solar power plants in Spain is creating an undeniable impact. A surge in electricity production has caused selling prices to crash, to the point where plant owners must actually pay to ensure the electricity they generate is absorbed by the grid.
This situation acts as a double-edged sword for the Spanish economy. While citizens are currently enjoying the cheapest electricity tariffs in Europe, investors and plant owners are suffering losses and are rushing to sell their facilities.
According to data from OMIE, the average electricity price per kWh in Spain has dropped drastically from Rp 2,850 in 2022 to Rp 1,110 in 2025. Between January and May 2026, average electricity prices ranged between Rp 680 and Rp 760 per kWh.
Furthermore, during several periods in 2026, tariffs plummeted into negative pricing. At negative prices, plant owners must pay transmission companies (similar to PLN in Indonesia) to take the electricity they produce.
In the first half of 2026, the number of hours with zero or negative prices has already exceeded the total for all of 2025. This means that on bright, sunny days, electricity producers are willing to pay approximately €5 to €25 (Rp 102,000 to Rp 511,000) per MWh to ensure grid companies are willing to accept the excess supply that the market cannot absorb.
This phenomenon is the result of Spain’s success in attracting over US$ 80 billion (Rp 1,434 trillion) in investment into the renewable energy industry. Massive development has caused solar power capacity in Spain to surge. Indeed, during periods of intense heat, electricity production rises far above the needs of both consumers and industry.
This sharp decline in prices has caused profit margins to shrink significantly. Daniel Pérez, head of the electricity company L’Energètica, admitted that the financial condition of plant operators continues to worsen.
“The economic condition of the business has deteriorated so severely that investors are attempting to divest their assets at significant discounts,” he stated, as quoted from a Bloomberg report.
At least four large-scale solar power units have already been offered for sale. However, potential buyers are bidding at prices far below the initial investment value.
The drop in prices for electricity generated by solar power is far more extreme than that of traditional power plants derived from steam or fossil fuels. This is because solar power production cannot be controlled, leading to an abundance during the day. Without battery storage, this excess energy goes to waste if not absorbed.
In addition to the need for battery investment, electricity grid infrastructure must also be adjusted to adapt to fluctuations in power supply that depend on weather conditions.
The case occurring in Spain serves as an important lesson for other nations, including Indonesia, which is actively developing renewable energy. The challenge is not merely installing as many solar panels as possible, but how to manage supply so that it remains stable, affordable, and remains profitable for businesses in the long term.
The phenomenon in Spain proves that clean energy can be a source of very cheap electricity. However, on the other hand, there must be careful planning to ensure that excess production does not instead harm businesses and hinder the continuity of future investment.