Solar industry urges quick adoption of Germany's renewable support rules to avoid disruption

The solar power industry has urged Germany’s government and parliament to quickly agree on a reform of the country’s Renewable Energy Act (EEG) and avoid a disruption of the guaranteed support mechanism that drives renewable energy investments. “In a worst-case scenario, solar power installations that start operation in early 2027 could permanently lose their right to receive support,” solar power industry lobby group BSW-Solar said.

Germany must overhaul the EEG before the European Commission’s state aid approval for the current funding regime expires at the end of 2026, as well as to comply with new EU power market rules requiring windfall-profit clawbacks from 2027. The coalition government parties, the conservative CDU/CSU alliance and the Social Democrats (SPD), have debated the mandatory reform’s design for months. The initial drafts proposed cuts to renewable energy support and an end fixed feed-in tariffs for new small rooftop solar systems, although coalition negotiators have since added transition rules.

Germany’s government cabinet adopted the reform in the summer and parliament has been debating it since September. BSW Solar said the draft had been presented too late and warned that renewable energy investors face a “dangerous support gap” if the European Commission does not greenlight the reform plans before the end of the year, which would result in a halt to support of all new wind and solar power projects. Planned auctions for solar farms could get delayed or cancelled while installations built outside of auctions might be left hanging in the balance, potentially leading to “existential challenges for many companies,” BSW Solar head Carsten Körnig said. 

According to newspaper Tagesspiegel, the government parties were still in disagreement about key aspects of the reform in early November. If they fail to present a proposal that Germany’s Council of States (Bundesrat) can agree on at its next session on 20 November, an adoption of the reform before year’s end becomes unlikely, the report said. 

Germany has supported the expansion of wind and solar power with its trademark renewables surcharge (the EEG in German): a guaranteed feed-in payment that producers of renewable electricity receive for every kilowatt-hour (KWh) they feed into the grid, usually during a 20-year period. The feed-in tariffs are credited with powering the country's renewables growth and reducing the price of renewable technologies. Since 2022, these payments are covered by the federal budget instead of a surcharge on consumers’ power bills. Support levels for renewables are set to go down as old, costly support contracts gradually expire.