AleaSoft Energy Forecasting, October 27, 2026. The evolution of electricity market prices and of the revenues captured by photovoltaics poses new challenges for renewable project financing. Adapting debt, reviewing PPAs and assessing hybridisation with batteries can improve the profitability and bankability of existing plants. Long-term forecasts and probabilistic scenarios are the basis for making these decisions.
The average market price is no longer enough to value a photovoltaic plant
The growth of solar photovoltaic generation is transforming the hourly price profile of the Spanish electricity market. The concentration of production during solar hours increases the downward pressure on prices in those periods, while other hours of the day register much higher prices.
Data from the Spanish day-ahead market show this difference. Between January and September 2026, the average price was €74.10/MWh, compared with €63.39/MWh in the same period of 2025. However, the average price in the band between 10:00 and 18:00 fell from €30.92/MWh to €23.87/MWh. This comparison of time bands does not represent the actual captured price of a plant, which depends on its hourly production, but it illustrates the importance of the generation profile.
In the first nine months of 2026 there were also 747 hours with negative prices, compared with 535 in the same period of 2025. These data reflect a market in which the hourly distribution of prices has a growing influence on the revenues of renewable assets.
Therefore, to value a photovoltaic plant it is not enough to know the expected evolution of the average market price. It is necessary to analyse captured prices, hourly production, possible limitations due to curtailment and the project’s exposure to the different market scenarios.
Profitability and financial structure: two aspects that must be analysed together
The evolution of revenues at some photovoltaic plants may make it necessary to review their financial structures. However, a reduction in revenues compared with initial expectations does not necessarily mean that the project is no longer viable.
It is important to distinguish between a plant’s capacity to generate sufficient cash and its compliance with the financial ratios required by its financing agreements.
The debt service coverage ratio, known as DSCR, relates the available cash flow to principal and interest payment obligations. A project may retain the capacity to meet its payments and, at the same time, fall below the coverage levels required by contract, depending on the terms of its financing.
This distinction is relevant because the solutions may be different. In certain cases, reviewing the repayment schedule, the financing terms or the coverage conditions can help to adapt the financial structure to the expected evolution of revenues.
The aim is a balance between asset profitability, repayment capacity and the risk assumed by financial institutions.
Probabilistic forecasts to size debt
In a market with growing price variability, a single forecast curve is not enough to assess all the risks of a long-term investment.
Financing decisions require analysing different revenue scenarios, from a central forecast to more conservative situations, with associated probabilities. This approach makes it possible to assess how the project’s repayment capacity would evolve under different market conditions and to determine a debt structure consistent with its risk profile.
Probabilistic metrics, such as the P10, P50 and P90 scenarios, make it possible to study the distribution of possible outcomes, provided it is specified whether the percentiles express probabilities of exceedance. For financing, it is particularly important to know what happens to revenues and financial ratios in the least favourable scenarios.
In this context, the AleaLow values, developed by AleaSoft Energy Forecasting, estimate a price for which there is a specific probability that the average market price will exceed it over a set of years. They are calculated directly from price simulations for various periods of years. The most demanded probabilities are 75%, 85% and 90%, although they can be calculated for others. Similarly, the AleaLow PV values represent the most bearish scenario of the captured prices of photovoltaics for a set of years with an associated probability.
These metrics provide a probabilistic reference for risk analysis and debt sizing, avoiding exclusive reliance on a central scenario or on arbitrary conservative assumptions. Their application must be complemented by simulating the project’s production and cash flows over the financing period.
Refinancing, PPAs and asset adaptation
The review of financing should not be limited to the terms of the debt. Power purchase agreements, route-to-market strategies and the technical characteristics of the asset also influence its future profitability.
PPAs can provide revenue stability and visibility, although their contribution depends on aspects such as the agreed price, the contracted volume, the delivery profile, the duration and the obligations assumed by the parties.
Depending on the circumstances of each project, it may be advisable to study new contractual structures, review market hedges or renegotiate certain terms of the refinancing.
These alternatives require long-term forecasts that make it possible to compare their economic impact and assess the evolution of revenues and risks over the entire life of the asset.
Hybridisation with batteries as an alternative to improve profitability
Adding BESS storage systems is another way to adapt photovoltaic plants to the new market conditions.
Batteries make it possible to store part of the energy and shift its sale to higher-value hours, as well as opening up opportunities to participate in other markets and balancing services, when technical and regulatory conditions allow.
However, the profitability of a hybrid plant is not calculated simply by adding the revenues of a battery to those of the photovoltaic plant. Both technologies must be analysed together, optimising operation according to forecast prices, technical constraints, efficiency, degradation and grid access conditions.
Hybridisation can change both the level and the distribution of future revenues and, in certain configurations, reduce exposure to the lowest-price hours. However, adding storage involves an additional investment, whose financing must be justified with realistic revenue scenarios and an assessment of long-term risks.
For this reason, the decision to hybridise must be based on a profitability and bankability analysis specific to each plant.
A solid future for photovoltaics with adapted financial structures
Photovoltaics will remain one of the main drivers of the energy transition towards an electricity system with a greater renewable presence. The challenge is to adapt projects, their route-to-market strategies and their financial structures to the evolution of the markets.
The future of photovoltaics is promising. The combination of greater operational flexibility, adapted financing structures and consistent scientific forecasts will strengthen project profitability and facilitate long-term financing.
Forecasts, analysis and advice for photovoltaic financing: the role of AleaSoft
AleaGreen, the AleaSoft Energy Forecasting division specialising in long-term forecasts, provides electricity market price curves with hourly granularity and horizons of up to 40 years. These forecasts make it possible to estimate the captured prices of photovoltaics and serve as the basis for PPA valuation and renewable project financing.
AleaStorage, the division specialising in energy storage, analyses hybridisation projects with solar photovoltaic and wind energy to maximise revenues and reduce risks, estimates battery revenues in the energy markets and balancing services, and models long-term price and volatility scenarios.
Meanwhile, AleaConsulting prepares market reports, as well as regulatory and expert reports, and carries out market forecasting audits for valuation processes, due diligence and M&A, while AleaHub facilitates the purchase and sale of PPAs, renewable assets and projects, and access to financing.
Source: AleaSoft Energy Forecasting