Thousands of small-scale solar power producers are trapped in a cycle of zero and negative prices; without risk-hedging tools, they are struggling to meet their financial obligations and face the very real risk of a new wave ofnon-performing loans, this time in the energy sector.
In practice, the intensifying barrage of zero prices and solar energy curtailments due to overproduction has upended the assumptions upon which thousands of small investors based their investments in previous years, with revenue losses reaching, according to them, as high as 60%.
According to banking sources, a number of photovoltaic owners participating in the feed-in tariff program have begun discussions to renegotiate financing terms and extend repayment periods in order to ease pressure on cash flow.
The issue, which is now taking on political dimensions, was raised at a meeting held on Friday, chaired by the Minister of Environment and Energy, Stavros Papastavrou, with the Panhellenic Federation of Photovoltaic Electricity Producers’ Associations (POSPIEF), with the ministry committing to three support measures for the sector, which, however, must first receive the green light from the European Commission. In summary, these are:
- Compensation for producers when wholesale prices are zero.The framework is such that when the wholesale price drops to zero for more than two consecutive hours, producers are not compensated. Zero wholesale prices are now routinely recorded in the market for 4, 5, 6 hours, or even longer.
- Extension of contracts for projects under the Differential Premium Operational Support Contracts (DPOSC) by five years. Extending the duration of these contracts would mean that producers could renegotiate their contracts with banks and extend the terms of the loans used to finance their investments, thereby reducing their monthly payments. In such a case, the current risk that the parks’ revenues—which are steadily declining—will not be sufficient to repay the loans would be eliminated. Given that the risk of financial viability varies depending on the construction cost of each project, it is estimated that the parks facing the greatest challenges are those developed during the 2022–2023 period, as equipment costs were higher at that time. However, this specific measure is estimated, as communicated to producers, to be quite difficult to get approved by the Commission
- A tariff surcharge for a transitional period, e.g., by 10%-20%, in order to reduce revenue losses. In essence, this would increase the selling price of each kilowatt-hour fed into the grid, which would somewhat offset the losses. Although the volume of “green” production that is compensated is constantly decreasing, in a scenario where the selling price increases, the total revenue loss will also be limited.
Banks and the new round of consolidation
In short, if no bold solution is found, a portion of the projects will be transferred to the banks—which they obviously do not want either—and the market will likely be driven into a new wave of consolidation. Thousands of small players who invested in photovoltaics with high debt and overly optimistic projections for the performance of their projects will be pressured to sell them at lower valuations.
According to a study conducted on behalf of the industry by Aristotle University of Thessaloniki professor Pantelis Biskas, the revenue loss rate for PV projects under the SDEP due to zero prices will rise to 42%–43% by 2026, with an upward trend. For 2027, it is estimated to reach 49%–50%, for 2028 approximately 44%, and for 2029 close to 48%.
According to the survey, the average revenue loss for the 2026–2031 period ranges from 41% to 42%. However, according to a statement by POSPIEF, during the first 20 days of April, the revenue decline reached as high as 62%.
In practice, the sector is asking that the tariff increase be offset by the upfront support producers will receive, although all of this will naturally have to pass through the European Commission’s scrutiny.
The root of the problem lies in overproduction and massive cuts that are increasing exponentially, reducing producers’ revenues, with official data showing that in the first four months, the energy produced but “thrown in the trash” was nearly 50% higher than last year.
The volume of energy produced but not absorbed by the grid reached approximately 876.5 gigawatt-hours, compared to approximately 588.5 gigawatt-hours last year (RAEY data)
The figures increase further when considering the picture of curtailments in market terms, as over time the ability of the FOSE to remotely control the RES units they represent has expanded. It is telling that in the first quarter, hours with zero or negative prices reached 239.5, whereas during the same period in 2025 this occurred for only 13 hours, according to Green Tank.
In any case, and regardless of the poor choices made by many small photovoltaic producers in recent years, the issue is that their financial losses will continue to grow, their parks will be navigating uncharted waters, and the risk of a new generation of “non-performing loans” is looming ever closer, as Metlen’s Executive Chairman, Evangelos Mytilineos, stated a few days ago.