New wind and solar cost Germany fraction of current support for old plants – industry
Clean Energy Wire / Handelsblatt
Support for new wind and solar power installations will cost Germany only a small fraction of what the state spends on existing ones, energy consultancy enervis has found an analysis commissioned by renewable energy industry association LEE NRW. The renewable power industry lobby group said the results indicated that planned changes to the country’s renewable power support regime will only lead to comparatively small savings.
Germany will spend an average of 0.72 cents for every kilowatt-hour (kWh) from wind turbines and solar panels that were awarded support in auctions since the beginning of 2025, while it must provide 6.58 ct/kWh for legacy installations, enervis found. New installations thus need 89 percent less support than older ones, according to the analysis. “Expansion today has arrived in an entirely different cost environment”, said LEE NRW executive director Christian Vossler.
Under Germany’s Renewable Energy Act (EEG), operators are guaranteed a minimum price for their electricity for 20 years, with the state covering the difference when market prices drop below the agreed level of remuneration. Since 2022, these payments are covered by the federal budget instead of a surcharge on consumers’ power bills. The high costs reflect the high level of support during the energy transition’s earlier years between 2000 and the early 2010s, as the costs for renewable power installations since have dropped significantly.
Vossler said that arguing with the high legacy costs of renewable power support to cut support levels today would therefore be misleading. Germany’s economy and energy minister, Katherina Reiche, had justified plans to cut support with the high costs for the budget. The German government therefore plans to halt or reduce support for certain categories of renewable energy sources, arguing that many projects would now be economically viable without subsidies. It also says that a fast expansion in areas with limited grid capacity leads to higher costs for grid management and curtailment at times of high output.
According to the enervis analysis, expected support costs for the new projects awarded in 2025 stand at 400 million euros in 2025, whereas support for all installations commissioned over the past 20 years stood at 14.8 billion euros in the same year. By comparison, a temporary fuel tax cut put in place from October to December 2026 is expected to cost about 2.5 billion euros in lost revenue, over six times more money than the new renewable power sources, the LEE NRW said. While it is important to keep renewables support in check, it would make little sense to “debate every tenth of a cent in support for renewables while mobilising billions in support for other energy policy measures,” Vossler said.
LEE NRW said the analysis deliberately used conservative estimates to correct for the “exceptionally low” results in recent auctions. Higher financing costs for new projects could well push required support up again, it added. However, the industry association argued that support under the EEG today no longer works like conventional industry subsidies but rather serves as a “safeguard” for investors.
Guaranteed remuneration under the EEG provides long-term stability on the revenue side, thereby lowering financing costs. “If revenues on the electricity market are sufficient, payments through the EEG will drop accordingly, down to zero,” Vossler said. This effect would be particularly relevant during times of high electricity prices, for example during an energy crisis triggered by higher fossil fuel prices. “Required support for renewables will drop as a result,” he added.
The government earlier this summer adopted a reform of the EEG that would change support conditions, and a “grid package” that links the expansion of wind and solar power to available grid capacity. Parliament is due to vote on the reform before the end of the year. The EEG must be overhauled before the end of 2026 to meet new EU state aid rules. The renewable energy industry, civil society groups, and lawmakers from different political parties have warned that the measures could throttle the pace of expansion and put capacity targets at risk. Proponents of the reforms include the CEO of grid operator Amprion, Christoph Müller, who told newspaper Handelsblatt that the changes “address complex technical questions that urgently need to be answered.”