1. Solar power reduces costs and strengthens the energy market

Photovoltaics has long been more than just a contribution to climate protection. The technology has a direct impact on the price of electricity – amounting to billions. A current study commissioned by BSW-Solar shows that feeding in solar power drives expensive fossil power plants out of the market, especially during peak times. This principle, known as the merit order effect, leads to falling exchange electricity prices – with measurable benefits for consumers, companies and the economy.

“Photovoltaics not only relieve the burden on the environment, but also on electricity bills,” says Jörg Ebel, President of the German Solar Industry Association. “This effect must be given greater political support and secured in the long term.”

2. How the price of electricity falls: The role of the merit order

On the electricity market, the most expensive power plant needed to meet demand determines the price. Since photovoltaic systems feed in electricity at very low marginal costs, they displace expensive conventional producers and thus reduce the overall price. This effect, reinforced by high PV feed-in, reduced the electricity price on the stock exchange by around 15 percent in 2024 compared to a scenario without photovoltaics.

This price effect also indirectly influences the tariffs for end consumers, even though households do not purchase directly on the spot market. Solar expansion also contributes to general cost containment in the energy system.

3. Economic stimulus through PV expansion

The positive effects are not just limited to electricity customers. Industry and infrastructure also benefit: energy-intensive companies can operate more competitively thanks to cheaper electricity prices. At the same time, transport losses are reduced because solar power is generated decentrally. This relieves the load on the grid and reduces dependence on fossil energy imports.

Photovoltaics thus creates a double relief, namely an economic and an ecological one. In addition, new business areas are emerging around storage, digital network services and system integration.

4. Political framework conditions in focus

Despite the proven advantages, the expansion of photovoltaics is clearly lagging behind the objectives. BSW-Solar is therefore calling for faster procedures, more funding instruments for tenant electricity and agri-PV as well as consistent space management. Solar potential on roofs, above parking lots or along traffic routes should be systematically developed.

Bureaucratic obstacles, long approval times and inconsistent state regulations are slowing down the momentum. Here the legislator is asked to create clear perspectives for investors and operators.

5. Overcome challenges – shape things together

In order for the billions saved through photovoltaics to have a long-term impact, several challenges must be overcome:

• Expansion and digitalization of the power grids
• Reliable investment conditions
• Use of previously undeveloped areas
• Introduction of innovative market mechanisms

Without coordinated efforts at all federal levels – federal, state, local – the energy transition risks failing due to complexity and contradictions. Federalism can be both an opportunity and a hurdle.

6. Solar energy as a price-stabilizing backbone

The study clearly shows that photovoltaics have long been a stability factor in the energy supply. By 2030, wholesale electricity prices could fall by up to 23 percent if solar expansion continues decisively.

This means: Anyone who wants to permanently reduce energy prices, strengthen climate protection and secure supplies cannot ignore solar energy. It offers predictable costs, reduces geopolitical dependencies and brings innovation to Germany.

7. Conclusion: Solar power is a central part of the solution

Photovoltaics no longer means additional costs, but rather savings potential and future security. Politics, business and society are called upon to support this development – ​​through investments, laws and social acceptance. Solar power is no longer an afterthought, but a key to stable prices and sustainable growth.