A surge in wind and solar power means many businesses and consumers around Europe can get paid for plugging in. The U.S. could be next.
5 min
KERKDRIEL, the Netherlands—For much of the spring and summer, Jeroen van Diesen got paid for using electricity.
Sometimes his neighbours came over to power up too, generating even more cash.
Van Diesen’s situation reflects the strange, new dynamics of electricity that could soon become the norm in many parts of the world: A big increase in wind and solar power has pushed wholesale prices to zero or below for many hours of the year, spurring a sea change in the way people use power—based on whether the sun is shining or the wind is blowing.
Most people pay a fixed price for each kilowatt-hour of electricity they consume throughout the day. The price is set by their power company and only changes at infrequent intervals—once a week, a month or even only once a year.
Van Diesen, a software salesman, recently signed up to receive electricity from two providers that charge him the hourly price on the Dutch wholesale power market, rather than a fixed price that resets monthly or annually. When the price of electricity falls low enough, smart meters in his house begin charging his two electric cars.
Wholesale prices swing wildly each hour of the day, and even more so as a larger share of electricity flows from wind and solar installations. Because the generation costs of wind or solar farms are negligible, market prices will be near zero when there is enough renewable power to cover most of a region’s electricity demand.
Electricity market dynamics get weirder when renewable-energy producers don’t have an incentive to stop feeding power into the grid, usually because of government subsidies. Then grids can be flooded with excess power, pushing prices into negative territory.
Van Diesen said he’s made 30 euros, equivalent to around $34, over the past five months charging his car, enough to cover the service fee from his power supplier, a Norwegian company called Tibber.
“I’m charging the car for free,” said van Diesen, who is part of a group of clean-energy enthusiasts in the Netherlands who call themselves green nerds. “To me it’s also like a hobby and a game—how far can I go?”
Doing laundry in the evening? The electricity could be free a few hours later when demand dies down and the wind picks up. Likewise, in regions with lots of solar power, charging an electric vehicle in the morning is usually far more expensive than powering up under the midday sun—or whenever the price is right.
In the U.S., most states don’t currently allow such real-time pricing, but many think that will change. Already, in some of the world’s biggest economies from Western Europe to California, the occurrence of zero and negative wholesale power prices is growing fast.
Wholesale prices across continental Europe have fallen to zero or below in 6% of all hours this year, up sharply from 2.2% in 2023 and just 0.3% in 2022, according to data collected by Entso-E, the group of European transmission system operators. In markets with lots of renewable capacity, this year’s figure was higher: 8% in the Netherlands, 11% in Finland and 12% in Spain. Analysts expect those numbers will grow as more solar panels and wind turbines are installed.
The changes sweeping Europe’s electricity markets, which were accelerated by the energy crisis brought on by the war in Ukraine, show what could happen in the U.S. in a few years when renewable capacity reaches a similar scale. In 2023, 44% of EU electricity was generated by renewables, compared with 21% in the U.S.
In some U.S. markets—sunny California, the wind-swept Great Plains, and Texas—zero and negative prices are already common. The wholesale price in Southern California was negative nearly 20% of all hours this year because of the region’s boom in solar-panel installations. That compares to around 5% last year, according to data collected by the U.S. Energy Information Administration.
U.S. regulators have been cautious about allowing households and companies to sign up for electricity plans that charge them wholesale prices, fearing consumers could be hit with big bills if prices jump. Texas consumers who signed such contracts were walloped with huge bills in 2021 when a rare winter storm sent prices soaring.
States’ reluctance, however, may now be waning as policymakers increasingly see real-time pricing as a way to lower peak demand, reduce the need for costly infrastructure and integrate more renewables into the grid.
California regulators this year ordered the state’s utilities to expand dynamic price pilot programs that have only been available for a select group of customers.
Your overall power bill still won’t be zero in a clean-energy future. Generation costs comprised around 60% of customer bills on average in the U.S. in 2023. Transmission and distribution costs account for most of the rest—and are expected to grow sharply in the coming decade to reinforce the grid for electric heating, electric transport and data centers.
Negative prices could also be reined in over the next few years as governments from Europe to California pare back renewable-energy subsidies. Governments are particularly focused on trimming subsidies for solar power, which is driving negative prices in a number of markets.
In Europe, energy-hungry manufacturers are shifting their operating strategies to maximise energy consumption when prices are close to zero or negative, while throttling back when prices are high.
Linde, a U.K.-based engineering company, is building a new generation of industrial gas plants that can be quickly ramped up and down depending on the wholesale price of power.
When solar and wind power drive prices down, Linde’s plants fire up and send the output to large tanks. When electricity prices shoot up again, the plants can ramp back down and supply customers out of the gases stored in the tanks.
“The tank functions like a virtual battery,” said Klaus Ohlig, a research and development executive at Linde Engineering.
Trimet, an aluminium producer that is one of Germany’s single-largest power consumers, is overhauling its smelters to vary their power consumption depending on the availability of renewable energy on the grid.
A new European Union law requires dynamic-price power contracts be made available to consumers across the 27-nation bloc. Tibber, a power retailer based in Norway that charges its customers the wholesale hourly price, has signed up more than one million households across the Nordic countries, Germany and the Netherlands.
Edgeir Aksnes, Tibber’s co-founder and chief executive, says he doesn’t expect customers to constantly track the hourly price before deciding when to charge their car or run appliances.
“We can automate all of this for you. You don’t have to think about it,” he said.
Some enthusiasts, however, like to get into the weeds.
Wouter van Embden, a 49-year-old Dutch entrepreneur and one of the country’s so-called green nerds, switched to Tibber earlier this year. On a recent summer Sunday, the battery in his home began charging as solar power flooded the Dutch grid and the wholesale power price fell to zero. He also charged his two electric cars and programmed his heat pump to make the water in the house tank extra hot.
Toward the evening, as prices rose with the drop-off in solar, van Embden’s battery—which he and his son built at home—would power his home as well as feed into the Dutch grid.
“I have to be honest, when I started building the battery I had so many outages. There was a lot of testing to do,” he said. “But now it’s working pretty stable.”
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Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
