Finance
Negative pricing reshapes solar finance as investors turn to storage for flexibility in Europe
Growing price volatility and the rise of negative pricing across power markets are pushing lenders and developers to rethink risk and revenue structures, focusing on asset flexibility and sustainable business models for storage, including co-location.
By
Marie Beyer
Oct 14, 2025
Finance
Image: Marie Beyer / pv magazine
The Aurora Energy Finance 2025 conference, held in Paris on October 8, brought together renewable energy financiers to discuss investment strategies in an era of increasing price volatility and negative pricing. As renewables take a dominant share of the energy mix, these market shifts are reshaping established business models and forcing lenders, developers and policymakers to re-evaluate how they assess and distribute risk.
Amid this uncertainty, new opportunities are emerging for those willing to adapt. The focus is moving toward flexible assets, evolving market signals and early-stage models for storage that can support long-term resilience.
Adapting to negative prices
A key challenge lies in adapting project models to the growing frequency of negative prices. Lisa McDermott, Managing Director for Project and Infrastructure Finance at Dutch commercial bank ABN Amro, noted: “Assets that are now operating during negative hours were financed historically, when lenders were not yet as familiar with negative pricing as they are today.”
[Editor’s note: Lisa also spoke at an event in Berlin on this topic covered by ESS News , ‘The playbook is broken’: Solar’s PPA deal shortage makes co-located BESS a necessity]
Recalibrating portfolios to account for this risk has become a priority. McDermott said negative pricing must now be reflected directly in project business models. Power purchase agreements (PPAs) will remain an essential tool, but their structure will need to evolve. “Risk has to be shared,” she said.
Investment strategies are also shifting toward revenue diversification, even where returns are less predictable. This reflects a maturing of financial and technical sophistication across the sector, which must now integrate more variables to build resilient portfolios. Increasingly, investors are turning to a new generation of independent power producers capable of capturing value not just through sales but through vertically integrated business models—with or without in-house trading desks.
Batteries and co-located projects
Asset value depends heavily on the market context in which it is developed. In Romania, for example, legislation has encouraged major developers such as Monsson to invest in batteries alongside solar, anticipating future grid constraints and aiming to preserve project value. In other markets, including France, the calculus is less clear.
Much depends on the condition of national grids, regulatory frameworks and the pace of planned network investments. Developers still lack visibility on how transmission operators will accommodate the rapid growth in renewable capacity. The forthcoming European Grid Package, expected in the coming weeks, aims to standardise development and operation across member states, providing a first step toward greater system coordination. Without such alignment, developers may continue to shoulder most of the risk.
For now, co-locating batteries with solar plants appears to be an increasingly attractive option, though profitability still varies by market. In Spain, co-located assets tend to outperform standalone PV, while in Germany, the economics are less favourable due to different market fundamentals.
Comparative analysis from Christina Rentell, Head of Research for France and the Iberian Peninsula at Aurora Energy Research, highlights the need for flexible modelling that can capture both high and low scenarios in order to assess risk coherently.
Storage and asset flexibility are emerging as central pillars of the new green investment landscape. Yet their integration and operation bring their own layers of risk and uncertainty, making long-term financial viability an equally complex challenge.
From pv magazine France
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