Solar power beyond the subsidy era
For households accustomed to offsetting their electricity purchases with rooftop solar exports, the end of net metering can feel like a setback. Electricity sent to the grid on a sunny afternoon will no longer necessarily cancel out electricity bought on a winter evening, prompting some owners to consider a home battery. Behind those changing household calculations, however, lies an encouraging development: solar has become a competitive source of new electricity.
The International Renewable Energy Agency (IRENA), an intergovernmental organisation supporting the energy transition, puts the global weighted-average generation cost of new utility-scale solar photovoltaic (PV) installations at $44 per megawatt-hour in 2025, down 89% since 2010.
Large solar farms have different economics when compared to individual rooftops, of course, but even with those distinctions, the scale of progress is clear: manufacturing growth and technological improvements have made solar a credible alternative when new generating capacity is needed.
Why solar output can drive electricity prices below zero
Across a region, commercial solar farms and residential rooftop installations frequently achieve peak output simultaneously. This synchronised surge significantly increases the volume of electricity entering the market during peak daylight hours. When consumer demand is low and opportunities to store or export this surplus power are limited, wholesale electricity prices decline sharply.
The International Energy Agency (IEA), which advises governments on energy policy, reports a marked increase in the frequency of negative-price hours across Europe. In its latest renewables outlook, the agency notes that falling prices during periods of high solar generation are increasingly undermining the revenue models of projects operating within merchant electricity markets.
These wholesale fluctuations do not automatically dictate the financial returns for individual homeowners. Compensation for exported power remains dependent on specific retail contracts. Furthermore, low wholesale prices do not inherently signify an overloaded local distribution network. Market oversupply and physical network constraints represent distinct operational challenges, though both are mitigated by shifting electricity consumption to periods of peak generation.
The market dynamic creates substantial commercial opportunities for battery storage, demand-side flexibility, and enhanced cross-border grid interconnections.
Net metering changes: examples from Europe, California and Australia
The rules for solar power are changing how homeowners around the world profit from their solar panels. Historically, a system called net metering allowed households to trade their solar electricity with the grid on a simple one-for-one basis, meaning every unit of electricity sent to the grid wiped out the cost of a unit bought later. Now, governments are moving towards net billing, which treats buying and selling electricity as two entirely separate financial transactions. Under net billing, the grid pays a lower, wholesale price for your extra solar power than what it charges you to buy electricity back. Because of this, it is becoming far more financially attractive to use your solar power directly inside your own home (for self-consumption) rather than exporting it.
In Europe, the Netherlands will end its traditional net-metering scheme (salderingsregeling) on 1 January 2027. To help homeowners adjust, a transitional rule will be in place until 1 January 2030, ensuring that energy companies pay at least 50% of their basic electricity rate for exported solar power before taxes. However, because energy companies can add their own separate export fees on top of this, homeowners will need to check contract details very carefully.
Meanwhile, in the Flanders region of Belgium, the change happens as soon as a household gets a digital smart meter. The digital meter stops the automatic reversing of the energy bill, removes a flat network fee called the prosumer tariff, and requires households to sell their extra power under a separate contract.
Other European nations show how neighbours can end up with completely different deals depending on when they installed their solar arrays. Poland introduced net billing for new installations in April 2022 but allowed existing solar owners to keep their generous, old system for 15 years. This means two side-by-side homes with identical panels can have completely different financial incentives. Italy has also closed its popular Scambio sul Posto scheme, which gave homeowners financial compensation based on the shifting value of the energy they used and exported. To get into this older scheme, Italian projects had to be up and running by 29 May 2025, leaving all newer projects to find alternative commercial contracts for their excess power.
Outside Europe, governments are using these new billing rules to intentionally change how people use energy. In California, the state's major power companies moved new solar users to a net-billing tariff in April 2023. While the basic rate paid for daytime solar power dropped significantly under this new system, the rates skyrocket during hot, late-summer evenings when the grid is under heavy strain. This created a massive incentive for households to store their daytime energy, driving a 70% battery attachment rate among new solar customers by the end of 2024.
Similarly, parts of Australia are testing "two-way" tariffs. The network operator Ausgrid gives households a free daytime export allowance but charges a fee if they send too much power to the grid during the sunny hours of 10:00 to 15:00. Conversely, it pays a premium credit for electricity sent to the grid during the peak evening hours of 16:00 to 21:00, encouraging people to save their power for when the network needs it most.
How battery storage extends solar’s usefulness
These evolving tariff arrangements create a much stronger economic incentive to store electricity generated during the day for use during high-demand evening hours. This shift is being heavily accelerated by falling storage costs, with the International Renewable Energy Agency (IRENA) reporting that the installed costs for four-hour utility-scale batteries declined by nearly 30% in 2025 alone.
While this dramatic price drop primarily applies to large-scale commercial projects rather than residential home batteries, the underlying physics of storage remain the same at either scale. Batteries operate with a strictly defined capacity and discharge duration, meaning that while they excel at saving daytime solar electricity for evening use, they cannot solve the broader challenge of supplying power through prolonged winter energy shortages. For a truly resilient energy transition, battery storage must be paired with complementary resources, including reinforced power grids, cross-border interconnections, flexible demand-side consumption, and dispatchable generation that can respond instantly to market needs.
What rooftop solar owners should consider before buying a battery
For residential households, the foundational step prior to investing in storage is a comprehensive evaluation of electricity-use profiles alongside the active retail supply contract. Homeowners must assess the correlation between peak generation hours and actual household consumption, while carefully reviewing import rates, export compensation benchmarks, and any associated supplier fees. For instance, in a market without net metering where a household pays 30 euro cents per kilowatt-hour for grid imports and receives 5 cents for exports, utilising a kilowatt-hour of solar energy directly behind the meter yields a net financial benefit of 25 cents.
A significant portion of this advantage can be secured without capital investment simply by shifting daily consumption habits. It makes practical sense to schedule high-load appliances, such as washing machines and dishwashers, to run during peak midday generation, or to direct surplus power toward charging electric vehicles and heating hot-water storage tanks. This shift not only maximises household savings but also actively lowers pressure on the national grid during peak hours.
Buying a home battery requires a completely separate financial check because batteries lose a bit of energy during charging, and the upfront equipment costs can swallow up your savings. You should always ask for a personalised calculation based on your actual household energy data, the total installed price, the usable capacity, and the warranty. If a company promises you extra income from automated electricity trading, ensure they show that trading income completely separate from your basic solar savings. It is worth noting that a home battery might not always fully recover its purchase cost. While a battery helps you use more of your own power on a daily basis, it cannot solve seasonal imbalances; massive summer surpluses will quickly overwhelm a standard battery, while low winter generation will leave it with nothing to store.
As tariff structures continue to evolve, every household will need to run these numbers fresh to find the right balance for their specific budget. Yet, these changing local rules should not overshadow the global achievement of solar energy: after decades of relying on government subsidies and high technology costs, it is now fully competitive on its own merits, successfully undercutting traditional fossil fuels on pure generation costs worldwide.
The next and final frontier is deploying smart storage, flexible networks, and intelligent consumption to bridge the gap between sunny afternoons and evening demand, securing a clean, affordable, and self-sustaining energy future.
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