Authors: Derek Michalski, Editor in Chief, The Voice of Renewables and Iliya Grozdanov, Partner, Dinova Rusev & Partners Law Office
Three years ago, Bulgaria had almost no grid-scale battery storage. Its National Energy and Climate Plan set a modest goal: 1.28 GW of storage capacity by 2030. That target has already been blown past — with four years to spare. By mid-2026, installed storage power ratings stood at roughly 3.4–4.8 GW, energy capacity awarded under EU grant schemes had passed 14 GWh, and the national regulator, KEVR, was projecting around 6 GW of installed storage by the end of the year.
The reason is solar, and specifically too much of it, arriving too fast, at the wrong time of day. Bulgaria installed 1.4 GW of solar in 2025 — its third consecutive year above 1 GW — taking cumulative capacity to around 6 GW, with another 2.5 GW forecast for 2026. Solar now supplies over half the country’s generating capacity at points in the day, and the effect on prices has been dramatic: on sunny spring days, midday wholesale prices have been tested down toward –€500/MWh, only to spike back up toward €250/MWh once the sun goes down.
Developers have concluded, bluntly, that standalone solar in Bulgaria is no longer bankable without a battery attached to smooth that curve out.The midday collapse bites the way it does because of the market rules, not only the physics. Since the 2019 Clean Energy Package (Regulation (EU) 2019/943), new large renewables sit in the merit order with full balancing responsibility and no priority dispatch, and under the 2024 market-design reform (Regulation (EU) 2024/1747 and Directive (EU) 2024/1711), reinforced by the state-aid climate guidelines (CEEAG, Communication 2022/C 80/01), support is not paid during negative-price hours. A standalone solar plant now eats the negative prices it helps to create — which is the legal mechanism behind the developers’ verdict.
Two EU-funded schemes did the heavy lifting. The RESTORE programme, backed by roughly €600 million from the Recovery and Resilience Facility, funded 82 standalone storage projects in its first round — allocating close to 10 GWh against an original 3 GWh target — before a second round in December 2025 added a further 31 projects and over 4 GWh. A separate combined renewables-plus-storage scheme awarded €273 million across 249 smaller and mid-sized projects, adding 3.1 GW of planned solar and wind capacity alongside 1.18 GW of storage. Between them, these programmes turned Bulgaria, in under three years, into one of Europe’s most closely watched storage markets.
That is the boom. The question The Voice of Renewables keeps hearing from developers and financiers is what 2027 looks like once the grant money stops.
The deadline problem
Both EU schemes come with hard cut-offs. Co-located solar-storage projects funded under the Recovery and Resilience Plan had to reach commercial operation by March 2026. RESTORE’s second tranche carries an even blunter deadline: projects that miss grid connection by 31 July 2026 forfeit their awarded subsidy outright, “fundamentally undermining project economics,” as one industry adviser put it.
These dates are not scheme quirks. They are back-calculated from the outer limit of the Recovery and Resilience Facility itself: under Regulation (EU) 2021/241, every milestone and target funded by the RRF must be met by 31 August 2026, with final Commission payments by the end of 2026, and the Commission has ruled out an extension. That matters for what comes next. A like-for-like “RRF tranche” successor is not on the table, because the instrument stops existing. Any post-RESTORE support has to run through a different legal channel — the Modernisation Fund, a state-aid-cleared national scheme, or a capacity mechanism — each carrying its own Brussels approval clock. The question is not whether Sofia confirms more money, but whether it can stand up a new legal vehicle and clear it with DG COMP before the pipeline stalls.
No successor funding mechanism has been publicly confirmed for what comes after.
Layered on top of that is a change of government. Rumen Radev’s newly formed “Progressive Bulgaria” won an outright single-party majority in April 2026’s election — the country’s first since 1997, and a source of administrative stability after years of fragile coalitions, though critics read the same result as presidentialism hollowing out the party system rather than steadying it.
Radev has previously used his powers to resist renewable market liberalisation, and his administration is expected to push at EU level for lighter regulatory burdens on the sector rather than more. Separately, Deputy PM Tomislav Donchev has said the country’s 2038 coal-closure deadline has effectively been dropped, with officials now saying “the market will determine” how long coal plants keep running — even as coal output has already fallen from around 34 million tonnes a year to 12–13 million tonnes on its own.
These dates are not scheme quirks. They are back-calculated from the outer limit of the Recovery and Resilience Facility itself: under Regulation (EU) 2021/241, every milestone and target funded by the RRF must be met by 31 August 2026,with final Commission payments by the end of 2026, and the Commission has ruled out an extension. That matters for what comes next. A like-for-like “RRF tranche” successor is not on the table, because the instrument stops existing. Any post-RESTORE support has to run through a different legal channel — the Modernisation Fund, a state-aid-cleared national scheme, or a capacity mechanism — each carrying its own Brussels approval clock. The question is not whether Sofia confirms more money, but whether it can stand up a new legal vehicle and clear it with DG COMP before the pipeline stalls
None of this threatens what’s already been built. It does cloud what gets built next.
Three ways 2027 could go
Momentum continues. A successor funding mechanism emerges in time, grid upgrades keep pace, and the new government’s scepticism stays rhetorical rather than operational. Solar cumulative capacity pushes toward 9–10 GW and storage toward 8–10 GW by the end of 2027, with Bulgaria consolidating a role as a flexibility exporter to Romania and Greece. Plausible, but it requires both the funding and political questions to break the right way at once — and, on the funding side, for a new legal vehicle to clear state-aid review fast enough to matter.
Grant cliff, then a plateau. The more consensus view among market participants. Most RESTORE-backed projects land by their deadlines, but with no confirmed successor programme, new project starts slow through 2027 while developers work out whether unsubsidised storage economics — increasingly a game of multi-market trading rather than simple arbitrage, as price spreads compress with every new battery that comes online — actually pencil out. Solar keeps growing, since utility-scale projects are already competitive without subsidy, but at a visibly slower rate than 2025–26. One analyst described this shift bluntly as the market moving “from growth to execution.”
Congestion and drag. Grid and interconnector bottlenecks — a problem flagged EU-wide, with roughly 120 GW of European renewables capacity estimated to be at risk from grid constraints generally — bite harder in Bulgaria specifically than developers have priced in. Curtailment rises in the most congested areas, the ambiguity over coal’s exit timeline unsettles longer-horizon investment decisions, and Sofia’s EU-level push against “regulatory burden” translates into slower permitting rather than just rhetoric. Deployment doesn’t reverse — too much is already under construction — but 2027 becomes a consolidation year, with a widening gap between announced pipeline and what actually reaches commercial operation.
One thing working in the market’s favour regardless of scenario: Bulgaria adopted the euro on 1 January 2026, removing a layer of currency risk that had complicated financing for foreign developers and lenders. That alone won’t resolve the funding-cliff or grid questions, but it should keep the country on investment committees’ shortlists while those questions get answered.
Both swing factors — a named post-RESTORE funding mechanism, and how permitting actually behaves under the new government rather than how it talks — should become visible well before 2027 begins. That makes this less a forecasting problem and more a matter of watching two specific, checkable things over the next few months.
