In Germany, the demand for solar energy has exceeded, and the surplus energy causing a drop in energy prices. During production hours over the past ten days, Energy  Producers have reduced prices by 87% sometimes even falling below zero. The average price has dropped to €9.1 per MWh, compared to €70.6 during non-solar hours. To overcome this issue, a long-term solution is to install energy storage systems to store excess solar energy and use it during high demand. Until then, countries with excess solar power will face changes in energy prices.

The demand for solar energy is peaking worldwide while in Germany solar energy production has exceeded demand, producing more energy than needed causing a drop in energy prices and hurting energy-producing companies’ profits, which have slowed down solar energy expansion.

According to the report from SEB research, in the last 10 days during production hours, solar energy producers have cut prices by 87%. During peak production hours, prices have fallen below zero. On average, the price was €9.1 per MWh, much lower than the €70.6 received during non-solar hours.

The cause behind this problem is the increase in solar capacity, installed around 14,280MW of solar power capacity in the country which is double compared to the previous year.

The problem of surplus energy production is not confined to Germany only. California also has the same issue of excess solar energy which has slowed down solar panel installations and progress toward a carbon-neutral future. Therefore, California lawmakers have cut payments to solar producers and allowed the state grid to sell extra energy to neighbouring states.

To overcome the issue of extra energy production, the long-term solution is to install energy storage systems. This system stores extra solar power and can be used on days, especially in cloudy weather and evenings when energy demand is highest. Until then, countries with surplus solar energy will face changes in energy prices.

In conclusion, solar overproduction has dropped energy prices, creating economic challenges for the producers and investors meanwhile it is beneficial for the consumers and the environment. The consumer will benefit from low electricity bills and more reliability in renewable energy in the environment. In the long-term solution, energy storage has to be upgraded for the efficient management of renewable energy and sustainably.

Sources 

Our perspective 

This scenario has negative and positive impacts on the country. Positive impact means consumers will receive benefits from surplus energy which results in low electricity bills, and promoting more renewable energy in the ecosystem. The negative impact will be faced by the company developing renewable energy and related to it due to low energy price. Therefore to overcome these challenges, It is important to install an energy storage solution.