Federal Ministry of Economics Plans Phase-Out Model for Solar Subsidies for Small Systems

Instead of a complete elimination of the tariff from 2027, the new model provides for the tariff to be 1 cent below the previous levels and to be paid for only three years. Owners of new small systems will now receive a reduced tariff for three years. In January 2027, the tariff for fed-in electricity is therefore not to be eliminated entirely, but will instead gradually decline over the following three years.

Planned Transition Arrangement and Tariff Rates

For most private operators, the end of subsidies for new systems from 2027 would initially have meant the loss of any tariff for the electricity fed into the grid. After 2029, operators must market their electricity directly, as planned in the Economics Ministry's draft bill. For direct marketing, they are to receive a bonus during the first four years.

Currently, the tariff rates stand at 7.78 cents per kilowatt-hour (kWh) for self-consumption systems up to 10 kilowatts of capacity (kWp). For the capacity portion above 10 kWp, it is 6.73 cents per kWh. For electricity from so-called full feed-in systems, up to 10 kWp one receives up to 12.34 cents, and above 10 kWp still 10.35 cents per kilowatt-hour. The tariff rates for new systems decrease by one percent every six months. The next reduction will take place in August 2026.

Solar Mandate in Several Federal States

In several federal states, including Schleswig-Holstein, Hamburg, and Lower Saxony, a solar mandate applies to all new buildings as well as to changes made to roofs for portions of the roof area. In Mecklenburg-Western Pomerania, no solar mandate is currently planned. In Hamburg, a special subsidy for solar systems installed on a green roof is also available until the end of 2026.

Anyone planning a photovoltaic system can obtain a low-interest loan from Kreditanstalt für Wiederaufbau (KfW) for financing. The installation of battery storage systems is also subsidized. The purchase and installation of PV systems are exempt from value-added tax.

Costs, Self-Consumption, and Subsidy Options

Smaller systems up to 5 kilowatts of capacity (kWp) cost approximately 13,500 euros including installation, according to an evaluation by the Verbraucherzentrale (as of 2025), while systems with approximately 10 kilowatts of capacity cost around 17,000 euros. Around 30 percent of electricity consumption can be consumed directly from a typical PV system, according to a Verbraucherzentrale estimate. If a battery storage system is additionally installed, this share can increase to around 70 percent.

If the roof is not suitable for installing a PV system, it may also be set up in the garden. Those who do not wish to invest in a photovoltaic system themselves can often rent one from local utilities, depending on the region and city. This is because manufacturers only provide the often very long warranties when installation is carried out by a specialist company.

Negative Exchange Electricity Prices and Their Consequences

In 2025, according to the Federal Network Agency, electricity prices on the exchange were negative for a total of 573 out of 8,760 hours. By May 2026, there had already been 242 such hours. Owners of photovoltaic systems that went online after February 25, 2025, no longer receive a feed-in tariff for electricity fed in during periods of negative exchange electricity prices. The affected periods are appended to the end of the approximately twenty-year tariff period – which therefore extends accordingly.

The Verbraucherzentrale recommends 1 kilowatt-hour of battery capacity per 1,000 kilowatt-hours of annual electricity consumption. According to another rule of thumb, the storage system should be able to store about 60 percent of the average daily electricity demand. The Verbraucherzentralen offer on-site suitability checks for roofs for 40 euros (appointment booking at Tel. 0800/809 802 400).