EU Solar Output Tops 340 TWh in 2025, Lifting Renewables to Nearly Half of Power Mix

Renewables accounted for close to half of electricity generation in the European Union (EU) in 2025, marking a shift from a marginal role to a system-defining position. At the same time, however, frequent price volatility has made power markets more fragile, creating revenue uncertainty for generators and increasing risks for investors without long-term contracts or support mechanisms, said Pexapark. 

This shift comes as solar generation reached a record level in Europe in 2025, according to the report, producing more than 340 TWh. This lifted solar’s share in the EU power mix to 12.6%, its highest level on record. Together, solar and wind now form the largest technology block in the European power system, surpassing nuclear, coal, and natural gas. The transition is no longer a forward-looking ambition or a theoretical milestone—renewables are now the dominant technology block in Europe’s power sector.

This builds on developments seen by the end of 2024, when combined electricity generation from solar and wind had already overtaken fossil-based generation in Europe for the first time. In 2025, the structural shift became even more pronounced. Over the year, renewables accounted for 47.8% of total EU electricity generation, with solar and wind alone contributing close to 30%.

European markets shift to 15-minute pricing

Another major change came in October 2025, when European markets shifted to 15-minute day-ahead pricing to better reflect generation variability and strengthen price signals for flexibility. The impact of a renewables-dominated system is also visible in traded volumes.

EEX reported record-high power trading activity, with European power spot market volumes rising 6% to 917.5 TWh, driven by increases in both day-ahead trading (+3%) and intraday markets (+13%). This reflects the growing need for trading and balancing actions in a system with a higher share of variable renewable generation.

However, as power markets become increasingly renewables-dominated, market dynamics are growing more complex. Paradoxically, these dynamics are beginning to create structural headwinds for renewables themselves, making the preservation of renewable asset value a central theme heading into 2026.

Hybrid contracts and negative pricing

To report suggested to manage evolving hybrid contract structures, address capture risk, along with managing exposure to negative prices. It said that while flexibility solutions are being integrated more systematically into investment and portfolio strategies. Negative price hours have increased sharply, particularly in solar-heavy and wind-heavy regions.

In 2025, Europe recorded more than 9,000 negative price hours in aggregate across all bidding zones. In Germany, day-ahead prices were negative 6.6% of the time, compared with 6.3% in Spain, 5.9% in Belgium, and 5.3% in Finland. This trend has continued to intensify year on year, eroding merchant revenues and forcing a reassessment of power purchase agreement (PPA) structures, particularly around price floors, curtailment rules, and compensation mechanisms during negative pricing events.

Storage, Hybridization & Market Redesign

In 2025, solar, wind, and battery storage confirmed their role as the system’s growth engines, offering the fastest and lowest-cost path to new capacity. However, low production costs do not automatically translate into stable or attractive revenues, nor into firm, timely, and consumption-aligned green supply. Bridging this gap is emerging as a central task—and a key responsibility—for asset owners, utilities, and corporate buyers alike.

The report also stated that policymakers face the challenge of designing frameworks that support investment while allowing price signals to function effectively. It suggested that progress from here will not come from chasing the next headline capacity number, but from more disciplined assumptions, clearer revenue strategies, and a deeper understanding of how renewable power is priced and valued across time and locations.

As volatility increases, decision-making is increasingly dependent on granular market data and continuous re-pricing of risk and value, rather than on broad averages, forecasts, or historical benchmarks. This is where robust price and market intelligence becomes essential, and where this report aims to contribute—helping readers step into 2026 not with fewer questions, but with better ones.