The solar challenge: between the manufacturers' crisis and the opportunity for developers

While solar panel manufacturers face a crisis due to global overcapacity, photovoltaic project developers find an opportunity window with the fall in CAPEX. However, some developers that secured capacity in recent auctions are struggling with financing issues, which threatens the execution of certain projects. According to José Donoso, Director General of UNEF, the situation is linked to the structure of the auctions and the strategy of some actors: "If they have had trouble obtaining financing, it is probably because they submitted excessively low bids", he explains. In an interview with Strategic Energy Europe, the executive points out that some developers took excessive risks in their bids, assuming they would be able to balance their finances later, which has not always been the case. "If you win the auction, you have a guaranteed price, but if you don"t, it"s because the low bid doesn"t allow for profitability", Donoso emphasises. This scenario has led many companies to seek loans in order to complete their projects. However, the competition for financing has intensified, and banks have increased their requirements, making access to capital more challenging for some developers.

The fall in CAPEX: an opportunity for developers One of the factors that has most benefited developers is the reduction in solar plant installation costs. According to Donoso, the CAPEX of photovoltaic plants has dropped by 95% compared to 2010.

This cost reduction has made projects more economically viable and has

boosted sector growth. This trend has facilitated project execution in Spain, allowing more developers to enter the market without relying solely on state auctions. However, the executive warns that this phenomenon does not automatically guarantee the success of all projects. Access to financing remains a key challenge, and developers must structure their bids in a way that ensures the financial viability of their initiatives. Crisis among solar panel manufacturers: overcapacity and fierce competition At the same time, the solar panel manufacturing industry is facing a critical moment.

The

excess global production, mainly driven by Chinese manufacturers, has generated extreme competition and a sharp drop in photovoltaic module prices. This situation has forced several manufacturers to reassess their financial positions and struggle to stay afloat. The UNEF executive explains that this phenomenon is part of a normal market cycle, where expansion phases are followed by periods of consolidation.

"Some manufacturers will not survive, and that is part of the market cycle", he states.

Additionally, he highlights that this process could represent an opportunity for developers, as lower module prices directly improve project profitability. Despite the crisis in the manufacturing segment, the demand for photovoltaic technology continues to grow, driven by decarbonisation goals and the energy transition in Europe. Spain, in particular, has become one of the most attractive markets, thanks to its high solar radiation and favourable regulatory framework. Spain, a key solar market in 2025 Despite these challenges, Spain continues to establish itself as one of Europe"s most important solar markets, alongside Germany and Italy. The combination of a supportive regulatory environment, high solar irradiation, and an expanding sector has positioned the country as a leader in the energy transition. However, Donoso warns that it is crucial to closely monitor ongoing policy developments, as new regulations in Germany, for example, could have an impact. "The issue of zero prices is a significant challenge because projects must ensure profitability even in a highly competitive environment", he states. In the coming years, Spain is expected to sustain its solar energy growth, driven by the decline in CAPEX and the need for electricity decarbonisation. Nevertheless, the sector will have to face challenges such as stability in project financing and the evolution of manufacturers in an increasingly competitive market.