Solar studies show profits hinge more on location than build cost

eFinancialModels says its new 2026-to-2031 solar market studies find that rising capacity is pressuring wholesale prices, curtailment and capture rates across nine major markets. The takeaway: project returns are becoming more dependent on grid access, offtake structure and timing than on simply adding more solar.

Why it matters: - eFinancialModels says solar added more than 600 gigawatts of new capacity worldwide in 2025, making it the largest installed power source globally. - The new studies suggest solar project economics are shifting from a build-focused model to a revenue-focused one. - That change matters for developers, investors and entrepreneurs weighing where solar can still deliver strong returns.

What happened: - eFinancialModels released Solar Market Studies 2026 to 2031 covering nine leading solar markets. - The studies are available in the platform’s Market Studies library. - The series spans markets across Asia, Europe, North America, Africa and Australia. - The markets were selected for the scale of their build-out and the depth of their investment activity.

The details: - In several saturated grids, added capacity is pushing midday wholesale prices lower. - In one leading European market, solar’s capture rate fell from 82% in 2020 to as low as 26% by early 2026. - In congested zones of the world’s largest market, curtailment has exceeded 30%. - The studies say project revenue is becoming the main variable in determining returns. - The studies identify capture-price erosion as a drag on projected lifetime revenue in markets where solar already supplies a large share of midday power. - The studies flag transmission capacity as a growing constraint, with curtailment affecting equity returns in the most congested zones. - The studies find that pairing solar with battery storage and selling into higher-priced hours improves project viability in several markets. - The studies say auctions, contracts-for-difference and corporate power-purchase agreements offer more revenue stability than merchant exposure. - The studies also note that tax-credit schedules, local-content requirements and pricing reforms affect project timing differently across markets. - eFinancialModels Research said the studies are intended to help teams assess market differences before committing capital. - eFinancialModels Research said outcomes over the next five years are likely to vary more widely between markets depending on capture rates, grid access and offtake structure.

Between the lines: - The core risk in solar is shifting from equipment and installation cost to market design and grid constraints. - Markets with strong build-out can still produce weaker economics if too much generation lands in the same low-price hours. - Storage and contracted revenue streams are becoming more important tools for protecting project returns.

What’s next: - Developers and investors will likely use the studies to compare market opportunities on a like-for-like basis. - The results point to more selective capital deployment, especially in markets with weak capture prices or high curtailment. - Future project planning may tilt toward storage, stronger offtake contracts and markets with better grid access.

The bottom line: - Solar growth is no longer enough on its own; where power is sold will matter more than ever.