Electricity is bought on the day-ahead market for the following day. In simplified terms, producers’ offers are ordered by price and the volumes needed to meet demand are selected. The last offer required sets the price for the relevant period. Low-cost generation can therefore reduce the cost of buying a much larger volume of electricity than it produces itself.
Solar affects the market in two ways. Power plants increase supply, while panels on homes and businesses reduce the amount their owners need to buy from the grid. Both effects can reduce the need for more expensive generation.
To estimate this contribution, the authors reran market clearing using OMIE data. They removed solar generation from the model and added the electricity produced by self-consumption installations to market demand. They then allowed for responses from interconnectors, gas-fired plants and hydropower to the changed prices. Removing solar without those responses would exaggerate the consequences.
The study’s central calculation is:
31.540 − 14.519 = €17.021 billion
€31.540 billion is the modelled cost of purchases for national demand without solar plants and self-consumption. €14.519 billion is the actual cost of those purchases on the day-ahead market. The difference is the estimated cost avoided over the period studied.
The average wholesale price was €60.2/MWh in reality, compared with €112/MWh in the scenario without solar. One megawatt-hour equals one thousand kilowatt-hours. These figures describe the electricity purchasing market, not the full cost of household bills.
National demand includes purchases by electricity suppliers and other market participants, including direct consumers. Some of the energy serves businesses and other system needs. Dividing €17.021 billion by the number of Spanish families would not give the savings of an average household.
Wholesale changes reach the end consumer through the terms of their contract. An indexed tariff can pass them through under its pricing formula. With a fixed price, the outcome depends on when and how that price can be reviewed. Bills also contain capacity charges, network charges, taxes and other components. UNEF’s study does not cover technical constraints, system adjustment services or forward contracts.
The authors divided the total estimate between ground-mounted solar and self-consumption in proportion to their generation: €14.230 billion and €2.791 billion respectively. The latter is already included in the €17.021 billion total. It is not a sum paid to owners of domestic panels or measured savings on their bills.
The model has a broader limitation too: it calculates a short-term effect using the offers submitted to the market. It does not reproduce years of development in an electricity system that might have built different power stations had solar never developed.
For a Costa Blanca property owner, the market-wide benefit and the performance of their own installation remain separate calculations. In a hypothetical example, a shop open during the day and an apartment with evening demand could both benefit from lower purchasing prices. They would, however, use their own solar output differently: the shop’s generation could coincide with demand more often, while surplus compensation terms would matter more for the apartment.
The study explains why solar’s influence extends beyond properties with panels. Its €17.021 billion figure describes avoided wholesale market costs. How much of that effect appears on an individual bill depends on the supply contract and consumption; the benefit of an installation of your own needs a separate calculation.