Fact Sheets 2025
Electricity Market Impacts of Wind and Solar
In wholesale power markets, the hourly price is set by the marginal cost of the last activated unit in the system. Since wind and solar power have no fuel cost, they push the price down by replacing more expensive fuel-consuming power plants. As wind and solar gradually become the primary power supply sources, market prices will drop on average, but price variations are likely to increase. This gives incentives for flexible demand and storage, which, in turn, will decrease the number of zero-price hours and associated renewable energy curtailment.
