Demand for home PV slows in Germany as industry sees lower grid expansion need

The rapid growth of solar PV installations in Germany's private homes slowed in 2025, with sales declining by 28 percent up to December compared to the same period in the previous year, industry association BSW Solar said. The lobby group also said a new analysis showed that the need for grid expansion to absorb additional solar power capacity could be much lower than previously thought.

The total number of household PV installations more than doubled between early 2020 and the end of 2025, from 1.7 million to 4.1 million, BSW Solar said, refering to data from Germany’s Federal Network Agency (BNetzA). At the same time, sales of battery storage systems, heat pumps and electric vehicles have all soared in recent years. This allowed so-called prosumer households to achieve much greater grid use efficiency thanks to load management, an analysis by the University of Applied Sciences (HTW) in Berlin found.

“The expansion of solar PV does not cause any additional need for grid expansion that would not have become necessary for other uses anyway,” the solar industry group said. According to the HTW analysis, the potential efficiency gains from combining a roof-mounted solar power installation with storage capacity has been underestimated. Battery storage would not only help absorb production peaks, but also flatten load peaks at times of high use. Smart storage solutions could therefore reduce the need for feed-in capacity to 60 percent of the installed peak power, the researchers found.

BSW Solar head Carsten Körnig said the “dream of solar power, storage, heat pump and EV is increasingly becoming the standard.” According to the lobby group, eight out of ten new solar power systems on private homes are now installed in combination with a battery storage system and four out of ten in combination with a heat pump or an EV. Declining installation rates therefore represent a setback for the energy transition as a whole, Körnig argued.

The fast growth of roof-mounted solar PV systems in Germany in recent years has led to concerns over the impact on distribution grids, which require updating to comply with the energy transition’s needs. As the number of total solar PV installations in the country has surpassed five million, grid operators called for more careful expansion to avoid overload. Germany's economy ministry wants to abolish support for roof-mounted installations, which would effectively cut growth, according to solar power industry representatives.