Solar Power Saved Spain €17 Billion: How Much Does Italy Lose by Underinvesting in Solar?

Spain has saved 17 billion euros over the past 18 months, according to a study by the Spanish Photovoltaic Union (UNEF). The report analyzed electricity price trends from January 2025 to June 2026, determining what market conditions would have been without the contribution of solar panels. The findings indicate that the average price on the daily electricity market would have been 86% higher in the absence of photovoltaic generation. This economic benefit extends to all consumers, including those who do not have rooftop solar installations.

In contrast, Italy continues to record some of the highest electricity prices in Europe. In 2025, the average cost on the wholesale market was 116 euros per megawatt-hour, compared to 65 euros in Spain. This 51-euro disparity persists while the country still needs to install tens of gigawatts of photovoltaic capacity to meet its 2030 targets. Although the Italian solar sector is expanding rapidly, natural gas retains a significant influence on electricity pricing. Consequently, even when solar irradiance is high, fossil fuels remain the primary driver of cost increases.

In Spain, solar photovoltaic installations have averted 17 billion euros in electricity costs.

A study by the European University of Finance (UNEF) compared actual spot market prices with hypothetical scenarios that excluded solar generation, including output from residential and commercial systems used for self-consumption. Over the 18-month period analyzed, the average realized price stood at 60.2 euros per megawatt-hour. According to the model, removing solar capacity would have pushed that figure up to 112 euros.

Of the estimated 17.02 billion euros in savings, 14.23 billion euros are attributed to large-scale solar plants, while 2.79 billion euros are linked to self-consumption. This latter component is particularly noteworthy: when households or businesses use electricity generated by their own panels, they draw less power from the grid. This reduction in demand on the market helps lower prices for all other consumers. It is a broadly shared benefit, given that one does not need to own a roof to enjoy the resulting price suppression.

The mechanism hinges on the dynamics of the European electricity market. Generation sources with the lowest variable costs, such as solar photovoltaics, are typically dispatched first. When output falls short of demand, more expensive plants, frequently gas-fired, come online and can set the market price. In June 2026, for instance, the average Spanish price stood at 69.6 euros per megawatt-hour. According to UNEF, the figure would have reached 162.7 euros without the contribution of solar power. That is more than double the actual cost.

The estimate derives from a simulation that accounts for the response of other generation technologies and applies to the wholesale market. Savings on individual bills, however, depend on supply contracts and other components of the final price.

In Italy, natural gas continues to dictate the price of electricity.

The Italian Energy Agency’s (ENEA) analysis of the national energy system highlights a significant gap with other European nations. In 2025, Italy recorded an average electricity price of 116 euros per megawatt-hour, compared with 90 euros in Germany, 65 euros in Spain, and 61 euros in France. For businesses purchasing large volumes of power, such disparities can undermine competitiveness. At the average prices prevailing in Italy and Spain, the purchase of 1,000 megawatt-hours would have cost approximately 51,000 euros more in the former country.

According to an analysis by the European Environment Agency, gas set the Italian electricity price during 66% of the hours analyzed in the first 16 weeks of 2026. In Spain, this figure was just 9%. Over the same period, gas accounted for 53% of electricity generation in Italy, compared with 16% in Spain. Conversely, low-emission sources contributed to 40% of Italy’s domestic production and 79% of Spain’s.

The current situation allows for the widespread deployment of solar photovoltaic panels operating under clear skies, while electricity prices remain heavily influenced by natural gas costs. Spain has developed an electrical grid over the past years with a significantly higher share of wind and solar power, thereby reducing its reliance on fossil-fuel-fired power plants. Although interconnections, energy storage, and other generation sources also play a role, the disparity in gas dependency is stark. This presents a specific drawback for Italy: unlike sunlight, natural gas must be purchased, frequently from foreign suppliers.

Italian solar capacity is expanding, yet the country still faces a shortfall of 31 gigawatts in its 2030 targets.

Italy’s solar photovoltaic sector is expanding. According to data released by Terna, the country had 48.3 gigawatts of installed solar capacity by the end of September. In the first nine months of the year, 4.83 gigawatts of new solar capacity came online, while total generation reached 44.5 terawatt-hours, a 20.5% increase compared with the same period in 2025.

The challenge emerges when these figures are measured against national targets. The 2024 Scenario Description Document published by Terna and Snam, aligned with the National Integrated Energy and Climate Plan, projects that the PNIEC Policy scenario will reach 79.3 gigawatts of solar capacity by 2030. Relative to the installed base recorded in September 2026, a gap of approximately 31 gigawatts remains.

Meanwhile, electricity demand is rising. Over the first nine months of the year, consumption grew by 5.2%. In September, as solar generation climbed 27.1% year-on-year, thermal power output also increased by 14.7%.

Reducing reliance on natural gas requires electrical grids capable of transmitting power, storage systems to utilize energy even after sunset, and permitting procedures that allow facilities to actually enter operation. On the latter front, the Council of Ministers issued a negative opinion on 16 out of 21 renewable energy projects examined during its meeting on October 28, a development previously detailed in an earlier in-depth report.

The targets outlined in the National Integrated Energy and Climate Plan remain clearly documented. However, the gigawatts specified in the plan are far easier to list in a table than to integrate into the electrical grid.

What is the true cost of Italy’s lag in solar power?

Quantifying the savings Italy could have realized through a faster rollout of solar infrastructure would require an analysis comparable to the Spanish study, one capable of reconstructing hourly price dynamics under scenarios of increased solar generation. Meanwhile, economic institutions have already identified the potential benefits of such an expansion.

During the Credit Day event, Paolo Angelini, the governor of the Bank of Italy, explained that expanding low-cost electricity production, supported by adequate storage and grid infrastructure, can help lower wholesale prices by reducing the number of hours in which costs are set by the most expensive power plants.

The Organisation for Economic Co-operation and Development (OECD) also highlighted the expansion of solar and wind energy as a pathway to contain energy prices and enhance the country’s competitiveness in its 2026 economic survey on Italy. The organization specifically cited the Spanish experience, attributing a roughly 20% reduction in wholesale prices to the growth of renewables, based on an analysis covering a different period than the UNEF study.

The European Environment Agency has provided another data point: according to its simulations, the expansion of renewable energy across the European Union since 2010 would have prevented approximately 29 billion euros in wholesale electricity costs during the first 16 weeks of 2026. This represents a significant economic buffer against the volatility of fossil fuel prices.

The issue now directly impacts energy costs, corporate competitiveness, and reliance on imports. Spain has quantified the benefits of its solar photovoltaic sector, while Italy still needs to assess the cost of missed opportunities, as the facilities planned for 2030 remain unrealized. Natural gas continues to drive electricity prices, and utility bills arrive on schedule. At least, those are not subject to regulatory delays.

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