Germany cuts renewable subsidies as firms delay investment over soaring energy costs

The German government announced two reforms aimed at lowering public spending on its energy policy. Minister of Economy Katherina Reiche said subsidies for solar and wind operators will be removed and new installations must sell electricity on the market, while “capacity‑limited” zones will discourage further renewable expansion. The industry federation BDI welcomed the move, but green‑energy NGOs condemned it as a step back for the transition.

At the same time, the German industry association DIHK reported that rising electricity and heating prices are prompting companies to postpone investments and consider relocating production abroad. About one‑third of more than 3,000 surveyed firms have delayed projects, and over 20% are eyeing capacity cuts or offshoring. DIHK president Peter Adrian linked the cost surge to the war‑driven gas shortage, higher oil prices and the transition to renewables, calling the situation “worrying” for Germany’s competitiveness.