Germany’s New Renewable Energy Law Slashes Small Solar Subsidies and Tightens Grid Compensation
Published on 07/21/2026 at 13:53 | Redaktion boerse-global.de
The German economics ministry has unveiled draft amendments to the Renewable Energy Act (EEG) for 2027, proposing significant cuts to compensation for renewable plants that are forced offline when the grid is overloaded. Under the so-called redispatch rules, operators would have to forgo up to 20 percent of their feed-in payments if their installations are curtailed—a change that critics say unfairly shifts the burden of insufficient network expansion onto clean-energy producers.
The redispatch threshold is being raised slightly: curtailment will now only occur when grid utilisation reaches 5 percent, rather than the originally planned 3 percent. The compensation cut applies for a maximum of six years. Environmental groups and parts of the Social Democratic Party (SPD) argue this penalises renewable generators for a problem they did not create.
Small solar loses its guaranteed tariff
A more far-reaching change targets private and commercial solar systems with a capacity below 25 kilowatts. From 2027, new installations will no longer receive the traditional 20-year guaranteed feed-in tariff. Instead, the draft introduces a three-year transition period during which payments consist of a base rate of 6.2 cents per kilowatt-hour plus a direct-marketing bonus of 1.5 cents. That bonus is capped at four years.
The ministry also plans to limit roof-mounted solar feed-in to 50 percent of the system’s rated capacity. The goal, officials say, is to reduce overcompensation and encourage self-consumption and battery storage. Analysts expect the profitability of small solar to become increasingly dependent on home batteries or electric-vehicle charging.
Auction volumes set through 2032
The draft law lays out concrete annual targets for competitive auctions. Onshore wind tenders are set at 15,000 megawatts for both 2027 and 2028, then decline to 12,000 MW in 2029 and eventually to 10,000 MW each year from 2030 to 2032. For ground-mounted solar, the volume stays flat at 14,000 MW per year. Biogas will see auctions of 1,000 MW in 2027 and 2028.
Legal concerns over network access rules
A study commissioned by the Stiftung Umweltenergierecht foundation has flagged potential legal violations. The experts concluded that blanket territorial restrictions on grid connection refusals might breach European Union law. Waiving compensation, they noted, is only permissible if operators genuinely agree and have alternative options.
Divided reaction from politicians and industry
The publication of the drafts has sparked intense debate. SPD energy spokeswoman Nina Scheer criticised the transitional payments for failing to provide enough investment certainty, warning that they would slow the expansion of renewables. Similar objections came from Green Party and Left Party representatives.
Heinen-Esser, president of the German Renewable Energy Federation (BEE), described the changes as existential for many players. The Solar Industry Association (BSW) predicted negative consequences for employment. On the other side, Alsheimer, CEO of ThĂĽga AG, welcomed the stronger market orientation and called for a clear regulatory framework so that grid operators can coordinate connections using efficient criteria.
The ministry opened a consultation with states and associations but allowed only three working days for responses. Numerous stakeholders are now demanding improvements to investment conditions and network access.
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