Serbia’s response to the EU’s Carbon Border Adjustment Mechanism is quietly drifting toward a solar-heavy narrative. This is understandable. Solar is modular, politically visible, quick to announce, and easy to frame in megawatts. But for CBAM-exposed industrial buyers, this approach is structurally flawed. It confuses installed capacity with delivered value and mistakes headline decarbonisation optics for procurement reality. If Serbia builds its CBAM defence primarily on solar, it will discover—too late—that it has solved the wrong problem.
The core issue is not whether solar is clean. It is. The issue is whether solar can deliver reliable, shape-compatible, and verifiable green electricity attributes to heavy industry at scale, under real grid constraints, without destroying capture prices or creating chronic curtailment. For Serbia’s industrial exporters, the answer is increasingly clear: solar alone cannot do this, and a solar-heavy mix makes the problem worse as volumes rise.
Wind, by contrast, aligns far more closely with the way CBAM actually bites. It is not just cleaner electricity; it is system-compatible electricity. That distinction matters more than most public discussions admit.
The starting point is capacity factor. In Serbia, bankable onshore wind sites consistently deliver 32–38% capacity factors, while utility-scale solar typically delivers 17–19%. This difference is not academic. It means that to deliver the same annual energy, solar requires roughly twice the installed capacity of wind. For an industrial buyer seeking 2.0 TWh per year of green electricity attributes, the arithmetic is brutal. Solar requires roughly 1,200–1,400 MW of nameplate capacity. Wind requires roughly 650–750 MW. That difference immediately translates into grid pressure, land use, permitting load, and—most importantly—system synchronisation.
Solar’s output is highly correlated across geography and time. When the sun shines, it shines everywhere. This creates a system-wide midday surge that collapses prices, saturates substations, and forces curtailment unless storage and export capacity are built at matching scale. For an industrial buyer, this synchronisation is toxic. It means that the hours when solar produces the most are also the hours when its electricity is least valuable and most likely to be curtailed. The result is a green attribute that exists on paper but fails to arrive when needed.
Wind behaves differently. Its output is stochastic, weather-driven, and geographically diversified. A wind portfolio spreads production across hours, days, and seasons. In Serbia, wind output tends to be stronger in evening, night-time, and winter periods, precisely when demand is higher and prices are structurally firmer. This temporal dispersion is why wind capture prices typically sit 5–15% above solar capture prices at comparable penetration levels. For CBAM-exposed industry, that price resilience is not a bonus; it is the difference between a hedge that works and one that fails under stress.
The grid implications follow directly. Solar-heavy portfolios cluster around a limited number of strong nodes, because developers chase the same connection points. Once those nodes saturate, marginal capacity becomes disproportionately expensive and increasingly exposed to curtailment. Wind farms, by contrast, are naturally more dispersed. They connect across multiple corridors, reducing node saturation and spreading system stress. This does not eliminate grid constraints, but it slows their onset and reduces the severity of curtailment when it occurs.
Curtailment dynamics illustrate the difference most clearly. In a large solar portfolio, curtailment is not an occasional event; it becomes structural once penetration crosses a threshold. Entire blocks of midday production are repeatedly curtailed because the system cannot absorb them. In wind portfolios, curtailment tends to be event-driven and localised, triggered by specific congestion or system events rather than by daily structural oversupply. The percentages matter. At scale, solar portfolios can drift toward 8–10% curtailment without aggressive storage and export build-out. Well-sited wind portfolios often remain in the 1–3% range, even as capacity grows.
For an industrial green supply platform delivering 2.0 TWh per year, each 1% of curtailment equals 20 GWh of lost eligible volume. At a realistic green electricity value of €70–90 per MWh, that is €1.4–1.8 million of annual value erosion per percentage point. The difference between 2% and 8% curtailment is therefore €8–11 million per year, recurring. No procurement team ignores that gap. No CFO should.
The impact on equity returns is equally stark. Solar portfolios with heavy curtailment and capture-price erosion exhibit wide IRR distributions. Best-case outcomes may still look attractive on paper, but downside cases are severe. Wind portfolios, by contrast, show tighter IRR bands. Under contracted or semi-contracted structures, unlevered wind IRRs in Serbia typically sit in the 8–10% range, with resilience under stress. Comparable solar portfolios often target 6–9%, but with materially higher downside skew once grid friction is priced honestly.
Storage is often presented as the solution to solar’s weaknesses. In reality, storage changes the equation but does not eliminate it. Batteries can shift energy across hours, but they do not create new grid capacity. To fully neutralise solar’s midday synchronisation at 1,200+ MW scale would require storage volumes that are capital-intensive and politically difficult to deliver. A 200 MW / 400 MWh battery may help, but it does not flatten a system-wide solar ramp when multiple gigawatts are producing simultaneously. Wind, by contrast, does not require storage to be bankable. Storage enhances wind portfolios, but it is not a rescue mechanism. This difference alone should reshape Serbia’s decarbonisation priorities.
CBAM magnifies these structural differences because it is unforgiving to failure modes that look small in domestic planning but large in cross-border compliance. An EU buyer does not care that a Serbian supplier has installed 1,300 MW of solar if the delivered green attribute volume is unstable, frequently curtailed, or poorly matched to consumption. What matters is whether the supplier can evidence consistent annual delivery, with limited variance and credible auditability. Wind is simply better suited to that requirement.
The risk of a solar-heavy strategy is therefore not that it produces no green electricity, but that it produces the wrong kind. It produces electricity in the wrong hours, at the wrong nodes, with the wrong risk profile for industrial buyers. It forces industry into a cycle of true-ups, replacement purchases, and compliance explanations that EU procurement teams increasingly have little patience for.
Wind’s role as a CBAM backbone does not mean solar is irrelevant. Solar remains essential as a volume layer, particularly at strong nodes and when paired with storage and aggregation. But volume without stability is not a CBAM solution. The stable core must come from wind, precisely because wind’s physics align better with system needs and buyer expectations.
There is also a strategic dimension. Wind projects tend to be fewer, larger, and more institutionally anchored. They lend themselves to utility-scale ownership, long-term contracts, and aggregation. Solar’s fragmentation makes aggregation harder and increases coordination costs. In a CBAM world, who controls the portfolio matters almost as much as what is built. Wind’s natural fit with portfolio control is an advantage Serbia has not fully internalised.
The most telling comparison is stress under delay. When grid upgrades slip by 12–18 months, solar portfolios often suffer acute IRR compression because early-year cash flows vanish and capture prices collapse further as commissioning slips into saturated periods. Wind portfolios degrade more gracefully. Partial commissioning is more feasible, geographic dispersion reduces system-wide impact, and capture prices remain stronger even when projects come online later than planned. In practical terms, wind portfolios often lose 80–150 basis points of unlevered IRR under such delays, while solar portfolios can lose 150–250 basis points or more.
For Serbia’s CBAM-exposed exporters, these differences translate directly into commercial outcomes. A wind-anchored green supply platform offers higher probability of compliance, lower volatility of delivered attributes, and greater resilience under grid stress. A solar-heavy platform offers faster headline capacity growth but a higher probability of underdelivery when it matters most.
The uncomfortable conclusion is that Serbia’s current decarbonisation discourse is misaligned with industrial reality. Megawatts are celebrated, but terawatt-hours delivered under stress are what CBAM rewards. Solar excels at producing megawatts. Wind excels at delivering usable energy.
If Serbia wants to defend its industrial exports under CBAM, it must invert its priorities. Wind should be treated as the backbone, solar as a complementary layer, storage as insurance, and aggregation as the operating system that makes the whole structure credible. Anything else risks building a decarbonisation façade that looks impressive domestically but fails the moment it is tested by EU procurement logic.
Elevated by clarion.energy