Germany’s Solar Boom Eases Power Costs as Gas Price Jumps

p7x37eaymcica}oafzdhc21f_media_dl_1.png EPEX Spot

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(Bloomberg) — Germany is seeing unusually strong solar power output in March, helping to cap electricity prices even as the conflict in the Middle East drives up the cost of energy worldwide.

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The country’s solar installations will feed more than 40 gigawatts of electricity into the public grid at noon on Friday for the fifth day in a row, according to data from the Fraunhofer Institute. Last year, there were only four days with this level of solar generation in the entire month of March.

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“In the short term, high solar output definitely dampened prices,” said Stephan Späth, meteorologist and power trader at ANE. “It was very sunny not only in Germany, but also in neighboring countries.”

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As energy prices surge amid the escalating conflict in the Middle East, domestic power generation that is not reliant on imported commodities is taking on renewed importance. Renewable energy, in particular, can act as a buffer, cushioning consumers and industry from price spikes that might otherwise have been even more severe.

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Germany has seen unusually clear, sunny skies due to a high-pressure pattern across eastern and central Europe that has drawn in a stream of dry air that is helping keep clouds from forming, according to government weather forecaster DWD. The same region of high-pressure is allowing a flow of warm air from North Africa into the continent, which is expected to bolster unusually mild temperatures across Germany and much of Europe for the next two weeks.

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Solar energy is Germany’s second-largest source of electricity after wind power. In 2025, renewables accounted for around 56% of the country’s total power consumption. Since shutting down its nuclear fleet in 2023, Europe’s largest economy has become more exposed to price spikes in global commodity markets. 

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When wind and solar output is low, coal- and gas-fired power plants must fill the gap — leaving the country vulnerable to swings in fuel prices. European gas futures have surged more than 60% this week.

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“The peak hours with high consumption, when there is no more solar power available, have become very expensive due to high gas prices,” said Späth.

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On Friday evening, power prices are set to peak at €248.91 per megawatt-hour, more than five times higher than midday levels, when solar output is high, according to data from Epex Spot. 

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The stream of warm air is also carrying sand whipped up by windstorms in the Saharan Desert, which could cause dramatic pink sunsets and create a haze that reduces solar generation in Spain, France and Italy on Friday, and in the UK and Benelux countries through the weekend, according to MetDesk meteorologist Ben Davis.

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Solar generation could be most affected in Spain, Italy and the UK, which could drops of more than 20%, according to MetDesk modeling. The Saharan dust is forecast to reach Germany, according to DWD, but the country is still expected to see unusually strong solar generation through next week.

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—With assistance from Eamon Akil Farhat.

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