'A powerful buffer': How solar saved the EU €37.4 billion since the war on Iran began
Europe's solar boom is cushioning households from the crippling costs of gas, as the war on Iran continues to highlight the dangers of fossil fuel reliance.
Since the war on Iran began, Europe has been safeguarding itself against the erratic pricing of fossil fuel imports, primarily due to the increased reliance on solar power. The ongoing conflict has led to a blockade of the Strait of Hormuz, a crucial shipping route that carries about one-fifth of the world's liquefied natural gas (LNG) supplies. As a result, the European Union (EU) has faced a significant energy price crisis.
Prior to the onset of the war, the benchmark Dutch TTF natural gas price was around €31.96 per MWh on 27 February. However, it surged to €72.35 per MWh by 30 September, a 126.5% increase. SolarPower Europe, however, has reported that harnessing solar energy has saved Europe €37.4 billion by reducing the demand for gas imports.
Walburga Hemetsberger, CEO of SolarPower Europe, emphasizes that solar power is the key to long-term energy security. Solar energy reduces Europe's dependence on imported fossil fuels, making the continent more secure. In June, solar energy became the largest single source of electricity in the EU, supplying 25% of the bloc's power.
Hemetsberger further suggests that electrification, increased renewable generation, and non-fossil flexibility solutions like battery storage can help shield Europe from potential future fossil fuel price shocks, forming the "route to long-term energy security."
Several European countries have already experienced the benefits of transitioning to green technology before the war on Iran. Spain, for instance, has doubled its wind and solar capacity since 2019, adding more than 40GW to its energy mix. This transition has reduced the influence of expensive fossil fuel generators on electricity prices by 75% since 2019.
Ember, an energy think tank, reported that Spain's wind and solar growth has led to a decline in the hours where electricity prices were tied to gas power, outpacing other gas-reliant countries like Italy and Germany.
In European power markets, the most expensive generator operating to meet demand, typically fossil fuels, sets the hourly wholesale electricity price. As generation from lower-cost technologies like wind and solar grows, it displaces gas and coal, reducing the impact of fossil fuels on prices. However, recent data from Eurostat shows that despite the significant growth in solar power, making up 41.6% of renewable electricity generation, the EU's reliance on gas has not decreased.
Gas-fired generation increased by 3.9% in the second quarter of 2026, even though renewable generation grew by only 2.8%. This indicates that weak hydro and wind generation still bring gas back into the system, highlighting the need for more solar power, storage, and flexibility solutions.
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