In December 2024, Romania ran its first Contracts for Difference (CfD) auction for renewable energy. Solar developers walked away with 432 MW of awards at an average strike price of roughly €51/MWh.
Eight months later, in August 2025, the second round closed. Solar bids cleared at an average of €40.46/MWh, with the lowest winning bid at €35.50/MWh and the highest at €45.20/MWh. The auction was oversubscribed, 1.49 GW was awarded against an offered 1.47 GW, and project sizes ballooned from a 70 MW maximum in 2024 to 260 MW in 2025.
In a flat market, that is a 20%+ price drop in two auction cycles. In a market under stress, it is the kind of number that makes capital allocators sit up.
The question is which interpretation is right, and what it actually means for anyone weighing a Central and Eastern European solar allocation in 2026.
What the headline number is really telling us
There are two stories competing for the same data.
Story one: a market finding its true cost. Romania enjoys 1,900 to 2,400 hours of sunlight per year, on par with Greece and Bulgaria and well above most Western European markets. Module prices have continued to fall, debt is available from the EBRD, IFC, Erste, UniCredit and others, and project sizes are scaling fast. Lower clearing prices are exactly what a maturing, competitive auction should produce. Romania’s Energy Minister Bogdan Ivan framed it that way directly, noting the second round delivered 2,751 MW of clean and cheap energy, 37% above the National Recovery and Resilience Plan target, at prices up to 50% below the maximum allowed.
Story two: developer desperation. The Energy Policy Group, a Bucharest-based think tank, has been more cautious. Their analysis suggests there is a “sense of desperation” in the solar market, with so many projects chasing limited offtake that some developers may have bid below the level needed for marginal profitability, especially once you factor in the rising number of negative-price hours and imbalance penalties. EPG also flags a feedback loop: very low CfD clearing prices anchor PPA expectations downward, which then makes the unsubsidised pipeline harder to bank.
Both readings are defensible. The honest answer is that the August 2025 number contains signal and noise, and the people separating them will be the ones who deploy capital well in 2026.
The structural case that keeps getting stronger
Strip away the auction theatrics and Romania’s underlying setup has continued to improve through 2025:
The country added 900 MW to 1 GW of solar in the first half of 2025 alone, on track to push total installed capacity past 7 GW by year-end, up from under 2 GW at the start of 2023. Romania and Bulgaria entered SolarPower Europe’s Top 10 EU solar markets list for the first time in 2025, with Romania posting the fastest growth rate of the peer group.
Across the two CfD rounds, roughly 4.2 GW of wind and solar has been awarded, surpassing the 3.5 GW target set under Romania’s National Recovery and Resilience Plan. The CfD scheme is backed by €3 billion from the EU Modernisation Fund. A third auction, focused on 290 MW of onshore wind, opened in late 2025.
Crucially, two policy moves in 2025 addressed the structural issue underneath the price debate: storage economics. In July 2025, Romania’s energy regulator ANRE eliminated the double taxation of stored electricity, removing transmission, distribution, system services and green certificate fees on power that batteries discharge back into the grid. Then in November, the government launched a €150 million municipal storage programme expected to add 385 MW of capacity, and in early 2026 the European Commission approved Romania’s broader battery storage subsidy scheme. R.Power, Engie, Electrica, Rezolv, Renovatio and others are all building BESS pipelines.
And foreign direct investment continues to vote with its feet. According to EY’s 2025 Attractiveness Survey, Romania jumped from 17th to 13th place in Europe and secured second place regionally among CEE countries for project numbers, with 94 FDI projects in 2024 versus 60 in 2023, the country’s best performance since 2019.
Where Romania sits in the European pricing landscape
Context matters. LevelTen Energy’s Q2 2025 European PPA Price Index showed solar PPA prices falling across most of Europe, with Italy, Poland and Romania posting the most pronounced declines, largely driven by oversupply of pipeline projects. By Q3 2025, average European solar PPA prices had fallen below €35/MWh, with Spain and Portugal leading the descent at 14.1% and 16.3% year-over-year declines respectively.
Read in that context, Romania’s CfD outcomes look less like an anomaly and more like a country whose auction design is efficiently pricing the same fundamentals investors are seeing across the continent. The difference is that Romania, alongside Bulgaria, Italy and Spain, is one of the few markets where gas dependence and wholesale price levels still incentivise long-term hedging through corporate PPAs, supporting the case for stable demand.
For comparison, Germany’s most recent innovation tender for hybrid solar plus storage cleared around €0.05/kWh (€50/MWh). Romania’s pure-play solar at €40/MWh is genuinely competitive on a like-for-like basis when accounting for irradiance differences, even before storage is layered in.
The real risks, named honestly
For an article to be useful, it has to name what could still go wrong.
Negative price hours and curtailment. Romania, like the rest of Europe, is dealing with more frequent zero and negative price hours during midday solar peaks. Romania’s mix is now 64% renewable, and curtailment is real, particularly on low-demand weekends. CfD payments do not cover power stored and re-injected from a battery (only directly injected generation qualifies), which historically discouraged colocated storage. The July 2025 reform on double taxation eased that, but the interaction between CfD mechanics and storage economics still needs refinement.
Anchoring effect on PPAs. Lower CfD strike prices set a reference point that PPA buyers will use in negotiation. Developers without a CfD who hoped to clear at €55/MWh in the merchant market may find themselves squeezed.
Guarantees of Origin. Romania is not yet a member of the Association of Issuing Bodies, which means GoOs cannot be traded across borders. This caps the cross-border corporate PPA market and remains the single most-cited regulatory ask from the industry.
Grid and execution. Permitting timelines of 1.5 to 2 years are far better than they were, but grid congestion is real, and project queues contain a meaningful share of speculative bookings. The market is shifting toward rewarding projects with credible land, permits, financing and grid pathways, which is healthy but means execution risk separates winners from losers.
Momentum Energy’s View
A 20% drop in clearing prices is the kind of number that invites a quick conclusion in either direction. We do not think either of the easy reads is fully right.
The bear case, that Romania’s solar market is now structurally unprofitable, leans heavily on assumed pricing dynamics rather than what is actually happening on the ground. Capital is flowing, multi-GW projects like Dama Solar are being built by serious sponsors with international debt facilities from EBRD, IFC and Tier 1 commercial lenders, and the policy framework is moving in the right direction on the issues that genuinely matter, namely storage economics, grid reform and pipeline discipline.
The bull case, that Romania is the obvious destination for any euro of solar capex in CEE, glosses over real friction. Negative prices, curtailment, anchoring effects on PPAs, and the unresolved AIB question are not trivial. Investors who do not price these in will be disappointed.
Our reading is more specific. Romania in 2026 is a market that rewards a particular kind of project rather than a particular kind of bet. The investors who will do well are those building hybrid solar-plus-storage assets, securing dual revenue streams through a combination of CfD and corporate PPA, partnering early with experienced local developers and EPCs, and treating bankability rather than headline IRR as the primary screen.
On those criteria, we believe Romania still scores better than most of its regional peers. The combination of irradiance, scale, EU funding visibility through 2030, an active CfD pipeline, a maturing PPA market, a 10 GW target by 2030, and a government that is increasingly willing to fix what the market identifies as broken adds up to a credible long-term opportunity. The August 2025 strike price is not a warning that the market is collapsing. It is a signal that the market is becoming legible, which is exactly what serious capital has been waiting for.
The investors reading €40/MWh as a red flag may be reading the wrong signal. The investors reading it as confirmation that Romanian solar has crossed from “frontier” to “investable at scale” are, in our view, closer to the truth, provided they bring storage, grid realism and execution discipline to the table.
