Reiche concedes ground on EEG reform: Solar subsidies for small installations will not be cut immediately

Originally, Reiche had planned to completely eliminate the fixed feed-in tariff for new small solar installations starting in 2027. This plan met with broad criticism. Opponents feared the original draft would slow down the energy transition. Federal Finance Minister Lars Klingbeil (SPD) and Environment Minister Carsten Schneider (SPD) had also opposed the first version from January.

What changes for small solar installations

After the transitional payment, operators of small installations can claim a direct marketing bonus for four years, according to the draft. In direct marketing, the electricity is sold on the electricity exchange via a service provider. Until now, operators who generate solar power on their roof and feed it into the grid have received a fixed amount per kilowatt-hour for 20 years.

BDEW chairwoman Kerstin Andreae welcomed the fact that the draft was now presented after a long preparation. "Die Energiewirtschaft und Investoren warten seit Monaten darauf", Andreae said. At the same time, she pointed out that the EU Commission must still approve the EEG under state aid law before investments in projects can be made from January. Andreae also criticized the short deadline of only three days granted to associations for submissions.

Reactions from the energy industry

On the issue of redispatch compensation, the ministry has also made improvements. New installations in areas with frequent grid bottlenecks were originally to receive no redispatch compensation. Now, from ministry circles: "Der Entfall der Redispatchentschädigung in Engpassgebieten wird genauer justiert". The background is so-called curtailments – compensation payments that arise when renewable installations must be temporarily shut down due to a lack of grid capacity. The reform aims to reduce these costs.

Reiche is pursuing the goal of aligning the expansion of wind and solar installations with the slower grid expansion in order to avoid expensive curtailments. She is sticking to the 80 percent target for renewable energies in the electricity mix by 2030. In 2025, the share of wind, solar, biomass and other renewable energies in electricity generation in Germany was 58 percent, according to the energy industry.

Focus on redispatch and grid expansion

The revised draft also raises the expansion target for biomass: instead of 8.4 gigawatts, at least 9.5 gigawatts of installed capacity are to be reached by 2035. "Damit stehen auskömmliche Mengen für bestehende Anlagen zur Verfügung, deren ursprüngliche 20-jährige EEG-Förderung in den kommenden Jahren ausläuft und die in ihre weitere Flexibilisierung investieren wollen", the draft states.

Incentives are also planned for wind energy expansion so that "eine ausreichende Menge Windenergie im Süden Deutschlands zugebaut wird". This is intended to distribute wind turbines more evenly across the regions. The Renewable Energy Sources Act has been promoting the expansion of green electricity in Germany since 2000.

Expansion targets for biomass and wind

Overall, the reform is intended to lower the costs of promoting renewable energies. The draft was already presented in a first version in January but met with resistance. With the transitional solutions now provided, Reiche is accommodating critics without abandoning the fundamental goal of more cost-efficient subsidies.

The planned changes primarily affect private individuals who own solar installations on their roofs. For them, the reform means that the economic incentive for new small installations is reduced, while at the same time transitional arrangements enable a gentler entry into direct marketing.