Reform fraught with obstacles, Part 1: Changes to the Renewable Energy Sources Act (EEG) also affect consumers

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For almost 25 years, the Renewable Energy Sources Act (EEG) has been the most important tool for the energy transition towards increased use of renewable energy. By utilising renewable energy sources – solar, wind and biomass – dependence on fossil fuels can be reduced: this would allow many billions of euros to be channelled into other sectors of the German economy, enabling better funding for social security, the education and healthcare systems, as well as the expansion of infrastructure.

Up to 69 billion euros (according to *Der Spiegel* for 2025) could be saved by avoiding the purchase of fossil fuels, and many billions of euros would no longer end up in the hands of autocratic regimes.

The EEG is now being revised by Katherina Reiche’s Ministry for Economic Affairs, as the current version expires at the end of the year. According to initial information on the amendment to the EEG, the new approach is geared towards ensuring that state funding for renewable energy is only provided if it is ‘needed and valuable’.

The only positive aspect of this EEG revision, in terms of achieving the target of carbon neutrality by 2045, is that the tenders for new wind turbines are to be expanded by 12 gigawatts (GW) by 2030. However, the task of identifying and developing the land available for these additional wind turbines lies with the federal states and local authorities.

Saxony lags behind

Saxony is already struggling to designate just 3 per cent of its land area as priority areas for wind power, which is why the state government has now reduced its land-use targets to 1.3 per cent by 2027 and 2 per cent by 2032. It remains to be seen whether wind turbines will actually be erected on the land designated as priority areas for wind power. Saxony is therefore still lagging behind in the expansion of wind power capacity.

Furthermore, the local authorities on whose land the renewable energy installations are located should actually benefit far more from the expansion of renewables through the provision of land via concessions and levies. Affected residents should also be able to see the benefits of the expansion of renewables through lower electricity prices and lower grid charges.

The task for the Ministry of Economic Affairs would be, on the one hand, to provide local authorities with greater financial compensation for making land available for renewable energy, and, secondly, when too much electricity from renewable sources is fed into the grid, not to curb this surplus electricity by shutting down solar and wind power plants, but to divert the electricity that cannot be consumed immediately to storage facilities of all kinds.

The Ministry would therefore need to ensure, in the event of high electricity generation:

a) that, through the expansion and digitalisation of the electricity grids, the electricity is collected from the generator and transmitted (massive expansion of grid connection options) and channelled to potential consumers (expansion of grid capacity).

b) that the electricity is then taken up as extensively as possible by consumers and industry at peak generation times,

c) that surplus electricity is temporarily stored within the country, and

d) only as a last resort, that the surplus electricity is sold or given away to other countries (preferably EU countries).

This requires a) a strategy for the expansion and digitalisation of the distribution network infrastructure, b) the transformation of the economy (transition from fossil fuels to renewable energy) and the provision of new smart meters (smart meter gateways) to consumers, as well as the simplification of direct electricity marketing (energy sharing and other options); c) expansion of storage capacity – the expansion of interim electricity storage in large-scale storage facilities, the coordination of vehicle battery storage, the use of pumped-storage power stations, or conversion into other media such as hydrogen, ammonia or storage in brine or iron filings.

But what is the Ministry for Economic Affairs, under Katherina Reiche, actually doing?

It is attempting to prevent, stifle and bureaucratise all previous developments in renewable energy; to slow down expansion; to introduce the most cumbersome administrative procedures possible; to erect barriers to investment; to cut subsidies; and so on.

Slowing down the expansion of small-scale PV systems through the new EEG

Until the end of December 2026, the provision under the existing EEG for a fixed feed-in tariff for a period of 20 years per kilowatt-hour fed into the grid will still apply to the connection of solar installations. Those who also consume the electricity they generate themselves can certainly operate their small-scale PV systems profitably, particularly as electricity tariffs rise.

Under the amendment to the Renewable Energy Sources Act (EEG), the feed-in tariff for smaller PV systems with a capacity of less than 25 kilowatts was due to be completely phased out from 1 January 2027. There were fears of an abrupt slump in the expansion of PV systems. Now, as a transitional solution, it is planned that the remuneration previously in place will only apply for a further 36 months.

After that, a bureaucratic monster will be re-established, requiring operators of small PV systems to sell their electricity directly on the electricity exchange in order to encourage them to behave in a way that ‘benefits the grid’. In other words, feeding electricity into the grid only when supply is limited and scarce. Furthermore, the technology and infrastructure required for direct marketing are still lacking.

This makes the situation difficult to predict and confusing. Which small-scale PV operator is expected to manage this on their own? The aim here is quite clearly to slow down the further expansion of solar installations.

Direct marketing may involve the use of brokers, whose services must be remunerated separately, thereby reducing the revenue.

From 1 August 2026, as provided for every six months under the ‘old’ EEG, the feed-in tariff for newly connected solar installations will be reduced again by around 1 per cent, to 7.7 cents per kWh. Under the new EEG, the above-mentioned provision for direct marketing – with a subsidy of 5.2 cents per kilowatt-hour – will apply for a maximum of three years. So, for those interested: it is advisable to install and connect a small-scale PV system before the end of 2026 if possible.

The hoped-for effect of these regulations is to reduce the strain on distribution networks, as expansion has been neglected for decades by the more than 850 local operators, resulting in limited connection capacity and making expansion quite expensive and complicated. Some distribution network operators have slowed down the expansion and are now being relieved of this burden, rather than the network expansion being boosted, as would be necessary.

Savings are also to be made for the federal budget through the current fixed feed-in tariffs, which amount to around 16 billion euros a year.

Will innovation from the private sector render feed-in tariffs obsolete in the context of direct electricity marketing?

According to information from the magazine ‘Erneuerbare Energien’ dated 31 July 2026, there are fortunately still resourceful companies in Germany. ‘If the grid operators fail to make progress, the marketing of electricity from small-scale installations will be taken over by the competition-oriented energy sector. For example, the green energy marketer Rabot Energy, together with the energy management provider Clever-PV and the metering point operator Inexogy, has developed a model to market electricity from small private solar installations. The partners have announced that this fully integrated solution for direct marketing is set to be available once the amended Renewable Energy Sources Act (EEG) comes into force.”

However, this requires the installation of a smart meter gateway and the integration of a battery storage system. In summer, it is optimised for self-consumption. Surplus solar power is fed into the grid specifically during the hours when it has the highest market value. In winter, the storage system charges cheaply from the grid during hours when electricity prices on the exchange are low or negative, and supplies the household when electricity is expensive.

Start-ups are capable of such innovations. Unfortunately, the Ministry of Economic Affairs can think of nothing better to do than to cut funding, scrap schemes, complicate procedures, or hinder and bureaucratise developments.