Cannibal panels

Earlier this month, Lazard, the notorious champion of LCOE-based wind and solar promotion, graced us all with the news that solar remains the cheapest energy generation capacity to build (in LCOE terms, of course). Even with an 18% cost surge in the United States, the bank said, solar is dirt cheap. Obviously, this means we should totally build more of it. Only, as usual, there is a problem.

The problem is big and becoming bigger with every new solar installation that turns landscapes into hellscapes. Its name: cannibalisation. Its weapon: capture prices.

Europe’s solar capture rates hit record lows as market divergence widens, Kpler reported in what sounds very much like a warning earlier this month. Always ready to be fascinated by something new, I clicked on the headline to discover that negative prices had a rival in the race to kill the energy transition by means of excess solar power.

First things first, though. What is a capture rate? It’s another name for a capture price, or a capture factor, which is the price that solar generators receive for their output on the broader market, outside fixed-price long-term power purchase agreements and contracts for difference. The lucky ones get CfDs and PPAs. The rest have to compete. And they lose, badly. Because, you would never believe this, but solar power output depends on solar irradiation, which tends to be the highest when demand for electricity—and prices—are the lowest. An absolutely unexpected development.