German economy ministry fixed on axing rooftop solar support, limiting renewables’ grid access

Germany’s economy ministry has confirmed plans to axe subsidies for rooftop photovoltaic (PV) panels as well as to limit priority grid access for renewable energy projects, newspaper Süddeutsche Zeitung reported. Business daily Handelsblatt quoted government sources as saying that the proposals are entering the early coordination phase and are set to be discussed in the cabinet in April. 

The plans correspond largely to two law reform proposals that had previously been leaked, namely the Renewable Energy Act (EEG) reform and the grid connection package, according to Tagesspiegel Background. 

Germany must overhaul its subsidy system for renewables to ensure that installations receiving state support give back “windfall profits”. This was decided at the EU level following the energy crisis in 2022, when many wind and solar power producers made “excessive” profits as electricity prices skyrocketed while still receiving payments from the state. A support mechanism that includes a "payback" clause must be in place by the end of the year.

The economy ministry has proposed to go even further, suggesting scrapping subsidies for rooftop solar installations. According to economy minister Katherina Reiche, these have already reached market maturity and no longer require state support. “As a result, subsidy costs for further expansion are expected to be reduced by over 20 percent compared to the current legal framework,” the ministry paper said according to Tagesspiegel Background. 

The second proposal, a “grid connection package”, would limit grid priority access for new renewable installations. Renewable energy operators would also have to agree to forgo curtailment compensation payments in areas with limited grid capacity, and could shoulder part of the electricity network's upgrade costs, the draft reform showed.

Germany’s government aims to better align the expansion of wind and solar power installations, power storage, and large electricity consumers with the expansion of grids, and a review of Germany’s support system for renewable energy sources has been a key policy goal of economy minister Reiche since taking office in May 2025. 

The ministry argues that steps to control the expansion of renewable energy capacity are needed to keep costs in check and allow grid expansion to catch up, but critics say planned measures will slow the energy transition and keep fossil power business models viable for longer. 

Negotiations on the two reforms now begin between the economy and other ministries, and the proposals must also go through consultations with the federal states and associations.