Germany EEG reform sparks debate over renewable energy subsidies

Germany is undergoing a significant debate regarding the reform of the Renewable Energy Sources Act (EEG), with proposed changes set to take effect in 2027. The reform aims to align renewable energy production more closely with market demand, grid stability, and electricity consumption.

Proposed changes include a shift from traditional feed-in tariffs to direct marketing as the standard for new photovoltaic, wind, and biogas plants. For smaller installations under 25 kilowatts, the reform could represent a paradigm shift, as they may lose access to guaranteed financial subsidies and market premium models, leaving only self-consumption or uncompensated direct marketing as options.

The CDU/CSU parliamentary group has proposed a catalog of 86 amendments, which includes phasing out EEG subsidies entirely by 2045 and reducing the duration of support for new plants. In response, members of the Green Party, including Felix Banaszak, have accused the Union of endangering approximately 430,000 jobs, particularly in rural areas, by introducing excessive bureaucracy and undermining energy security.

Additionally, banks have issued warnings to Economy Minister Katherina Reiche regarding increased bureaucratic hurdles. The reform seeks to address high costs associated with grid congestion measures, which reached approximately 3.1 billion euros in 2025.