EEG Reform: Reiche Plans Transitional Rule for Small Solar Systems from 2027

As a transitional payment, grid operators are to pay one cent per kilowatt-hour less than under the previous tariff. With this temporary rule, the ministry is responding to criticism from coalition partner SPD and from the solar industry, which had originally feared the complete abolition of the fixed feed-in tariff for small systems.

Background: EEG and the 80 Percent Target by 2030

At the same time, Federal Economics Minister Reiche reaffirmed the goal of reaching an 80 percent share of renewable energies in the electricity mix by 2030. In 2025, the share of wind, solar, biomass, and other renewables was 58 percent, according to the energy industry. With the EEG reform, Reiche intends, by her own account, to reduce the costs of promoting renewable energies.

Criticism came, among others, from the German Solar Industry Association (BSW). Chief Executive Carsten Körnig warned that the plans were outdated and endangered investments worth billions as well as tens of thousands of jobs in small and medium-sized businesses and skilled trades. The association stated verbatim: "Die Pläne sind gänzlich aus der Zeit gefallen. Sie halten Privathaushalte länger in fossiler Energieabhängigkeit und gefährden Zehntausende Jobs in der Solarbranche." The BSW fears that large parts of Germany will become so-called no-go areas for renewable energies.

Sharp criticism also came from the ranks of the Greens. Economic policy spokesperson Michael Kellner said the grid package disproportionately favored grid operators, who would be given six years to eliminate bottlenecks. He added: "Hier wird der Ausbau vertrödelt. Sonnenstrom vom Dach wird mit dem Paket massiv beschränkt. Das ist falsch. Wir könnten die Energie gut gebrauchen, auch und gerade fürs Kühlen mit Klimaanlagen."

Criticism from the Solar Industry and the Greens

The draft also provides that new solar and wind installations in regions with existing grid bottlenecks should receive lower compensation if they have to be temporarily shut down to avoid grid overloads. The Federal Ministry of Economics had already presented a first draft in January, which met resistance from Federal Finance Minister Lars Klingbeil (SPD) and Federal Environment Minister Carsten Schneider (SPD).

With the now planned transitional period of up to three years, the ministry is indirectly responding to these objections. For existing systems built before 2027, the 20-year fixed feed-in tariffs continue to apply under current law. Only after the transitional phase expires are system operators expected to orient themselves directly to the electricity market.

Observers view the compromise as a political signal to coalition partner SPD and to affected skilled trades and solar businesses. It remains unclear whether the transitional rule will hold up in the parliamentary process. In its draft, the Federal Ministry of Economics pointed to the goal of limiting subsidy costs without simultaneously blocking the expansion of renewable energies.

Political Assessment and Outlook

The solar industry is meanwhile demanding further improvements. The BSW is calling for the transitional phase to apply not only to systems up to 25 kilowatts but also to medium-sized rooftop installations. In addition, compensation during the transitional phase must be closer to the previous feed-in tariff in order not to discourage investments in new builds.

Independently of this, initial analysts have taken note of the EEG plans. Jefferies & Company Inc. issued a buy recommendation for SMA Solar on 06/30/26. The stock of the inverter manufacturer is seen in the market as an indicator of investment readiness in private and commercial photovoltaics in Germany.

According to the Federal Ministry of Economics, the final version of the EEG draft is to go into interministerial coordination in the coming weeks. This will be followed by deliberation in the Cabinet and the Bundestag. Until then, both industry associations and the SPD federal ministers Klingbeil and Schneider are likely to push for further changes to the transitional rule.