The Federal Cabinet recently approved a reform of the Renewable Energy Sources Act (EEG) alongside a new “Grid Package,” following an agreement between Economics Minister Katherina Reiche (CDU) and Environment Minister Carsten Schneider (SPD).
A core element of the EEG revision is the phasing out of fixed feed-in tariffs for all photovoltaic (PV) installations. Instead, electricity generated must now be sold based on current market conditions. While PV promotion bonuses will be standardized, the guaranteed feed-in capacity for smaller and medium-sized rooftop systems will be capped at 50 percent. Furthermore, the auction volumes for biogas plants between 2027 and 2030 are set to increase slightly, and small systems will be given a flexibility bonus allowing them to contribute to system responsibility through controllability. A special auction for wind power is also slated, as was agreed in the national climate protection program.
Minister Reiche stated that this move marks the end of the EEG as an “all-inclusive, worry-free package.” She emphasized that the reforms aim to promote cost efficiency by ending subsidies for installations that would have become profitable regardless.
The accompanying “Grid Package” dictates that operators of new wind and solar projects will no longer receive full compensation if they cannot feed electricity into the grid due to bottlenecks. The potential risk for investors has been capped at a maximum of 20 percent of annual electricity yield, or 18 percent in nationally designated wind priority areas. In specific regions identified as “hot spots,” compensation will cease entirely. The Economics Minister defended the new legislation, explaining that it links critical topics-synchronization, grid connection, and system responsibility-into a meaningful whole, addressing current challenges while preparing for the future.
However, industry associations have expressed concerns that the package could potentially slow down the expansion of renewable energy, a sector that is already falling behind its legislative goals, despite the fact that grid expansion is currently lagging even further behind the pace of renewable growth.
Critics, including the German Environmental Agency (DUH), argued that the government should not jeopardize the energy transition at a critical moment. Barbara Metz, the DUH head of federal operations, commented that a compulsory direct marketing system would be impractical and economically unfeasible for many small installations.
Sacha Müller-Kraenner, the DUH’s federal executive, added that the reforms essentially shift the risks associated with delayed grid expansion onto the wind and solar operators. While acknowledging that the “Grid Package” addresses the significant hurdle of grid connections, he stressed that merely issuing non-binding progress reports will not expedite these connections, and regional differences in procedures risk creating yet another fragmented patchwork.
