Scientific paper ID 2781 : 2026/1

This article examines the interconnections between the rapid expansion of renewable energy plants and day-ahead wholesale electricity prices on the Bulgarian Independent Energy Exchange, and draws out the consequences for the financial viability of new renewable projects. Using 1,096 daily observations for 13 July 2023 to 12 July 2026, six price specifications are estimated by ordinary least squares with Newey–West standard errors. A dynamic specification that s the lagged price is clearly preferred (adjusted R2 = 0.553, AIC = 10,207), and price persistence dominates the daily dynamics. The estimated time path is downward, consistent with the merit-order effect, although strong collinearity between cumulative new energy capacity and time prevents a clean estimate of the isolated energy capacity effect, and the decline coincides with the post-2022 easing of gas prices. Because falling wholesale and capture prices erode merchant revenue, static appraisals that assume an unchanged average price overstate project value. A secondary, cluster analysis of 100 photovoltaic enterprises identifies three project types that differ mainly in scale and appraisal metrics, which supports differentiated rather than uniform public support. The article proposes a compact policy roadmap combining revenue stabilisation, flexibility incentives, cluster-specific finance and improved energy-market transparency.

JEL: C22, G31, Q41, Q42, Q48