Italy’s solar capture price falls below market average in southern regions
Rising photovoltaic generation is reshaping Italy’s wholesale electricity market, increasing the frequency of zero or ultra-low price periods and widening the gap between solar captured prices and average market values. New analysis from Italian PV association Italia Solare shows that solar-heavy zones recorded significant price discounts during peak generation hours in the second quarter, raising concerns that declining solar revenues could accelerate as early as 2027 without wider deployment of storage and hybrid PV-plus-storage solutions.
Data released by the association show that the impact of solar generation was directly reflected in the frequency of zero or extremely low price hours on Italy’s Day-Ahead Market (MGP) during the quarter. All hourly prices below €20 ($22.9)/MWh occurred between 10:00 and 18:00, coinciding with periods of highest solar irradiance, particularly between 12:00 and 16:00. The Calabria, South, and Sicily bidding zones, all located in southern Italy, recorded prices below this threshold for 215 hours during the quarter.
“Monthly zonal spreads — the difference between average monthly zonal prices and the National Single Price (Prezzo Unico Nazionale, PUN) Index, which represents the weighted average of all zonal prices — were significantly negative in the South and the Islands, reaching historic lows in May. Sardinia recorded a spread of -€8.57/MWh and Sicily of -€7.72/MWh compared with the PUN Index,” Italia Solare stated.
According to the association, a sharp decline in solar captured prices could occur as early as 2027. Moreover, Italia Solare recorded in May a widening gap between the solar captured price (SCP) and the average baseload price, defined as the average electricity price calculated across all hours of the day.
The SCP is the weighted average electricity price actually earned by a solar power generator for its output. It is calculated by weighting the market price in each hour by the amount of solar electricity produced during that period, then dividing the total value of generated electricity by the overall solar generation volume.
“In Sardinia, against an average baseload price of €110.78/MWh, the SCP stood at €64.8/MWh, representing 58% of the average baseload value. In Sicily, the SCP was €66.3/MWh, equivalent to 59% of the average baseload price of €111.63/MWh. In the South and Calabria zones, the indicator reached €66.9/MWh, corresponding to 60% of the average baseload price,” Italia Solare said.
The PUN Index declined from a March average of €143/MWh to €119/MWh in April and May, driven by a combination of increased photovoltaic generation and lower electricity demand. A subsequent heatwave pushed prices higher again in June, with the average rising to €131/MWh.
“The report clearly highlights the challenges linked to zonal spreads and the captured price of solar power. In this context, storage and the combined management — physical or virtual — of batteries and photovoltaics will play a pivotal role. Traders can help stabilize revenues by optimizing battery participation across markets and structuring PPAs around bankable hybrid PV-plus-storage profiles,” said Silvia Barenghi, co-coordinator of the Markets Working Group at Italia Solare.