Germany's solar subsidy reforms spark industry backlash

The Federal Ministry of Economics, led by Minister Katherina Reiche (CDU), has drafted a revision of the Renewable Energy Sources Act (EEG). The proposal ends guaranteed feed‑in tariffs for small rooftop photovoltaic systems up to 25 kW that are installed after 2027, replacing them with a limited transition payment of up to 36 months and requiring owners to sell their electricity on the market themselves. The draft also reduces compensation for new wind and solar plants in regions with grid congestion, potentially creating zones where renewable generation is curtailed.

Industry groups – the German Solar Industry Association (BSW), the Association of Renewable Energy (BEE) and others – warn that the changes could halt billions of euros of investment, threaten tens of thousands of jobs in the solar sector and keep households dependent on fossil fuels. BSW chief Carsten Körnig said, “The plans are completely out of step with the times,” and BEE president Ursula Heinen‑Esser called the reforms “significant deteriorations” for renewables. The ministry argues the overhaul stops over‑subsidisation and aligns the market with realistic economic conditions, but critics describe the adjustments as “ineffective band‑aids.”