Germany’s Solar Subsidy Phase-Out Sparks Industry Uproar Over Jobs and Investments
Published on 07/19/2026 at 13:12 | Redaktion boerse-global.de
Solar industry associations are mobilising against a government proposal that would end fixed feed-in tariffs for new small-scale photovoltaic systems by 2030, warning of tens of thousands of job losses and billions of euros in stranded investments. The draft reform of Germany’s Renewable Energy Sources Act (EEG) was sent to states and interest groups on 17 July by Economy Minister Katherina Reiche, setting off a fierce debate.
Under the plan, small solar plants — those with a capacity below 50 kilowatts (kW) — will enter a staged phase-out starting in 2027. Installers would receive a guaranteed payment for a maximum of 36 months, at roughly one euro cent per kilowatt-hour less than current rates. After that, they must sell electricity directly to the market, though a bonus of 1.5 euro cents per kilowatt-hour will be paid for four years. The threshold for receiving any transition payment tightens sharply: to 25 kW in 2028, then 7 kW in 2029, and from 2030 all new installations must go straight into direct marketing. Additionally, the feed-in cap — the share of installed capacity that can export to the grid — would fall to 50 percent.
The German Solar Industry Association (BSW) attacked the proposals on 18 July. “This plan is out of touch with the times,” said Managing Director Carsten Körnig, warning that the sector’s growth could stall and jeopardise a multi-billion-euro investment pipeline. The Renewable Energy Federation (BEE) added its voice, with President Simone Heinen-Esser noting that the industry employs more than 436,000 people and commands an investment volume of about €37 billion. “Rather than creating reliable conditions, the new rules are provoking fresh uncertainty,” she said.
Political criticism has been swift. The Greens called the draft a brake on the renewables expansion, while the Left party argued that smaller installations such as balcony solar units would lose their economic viability. The draft is the result of months of negotiation between Reiche’s ministry, Finance Minister Peter Klingbeil, and Environment Minister Steffi Schneider.
Alongside the solar provisions, the reform package tackles redispatch costs — currently around €3 billion a year — by reducing compensation for new plants when the grid is congested. An earlier, more aggressive plan to scrap compensation entirely was softened in the version sent out on 17 July. Instead, operators will face a “peak capping” rule: curtailment above 5 percent of output will not be compensated. This measure is capped at six years and applies only to a maximum of 20 percent of the electricity generated.
The Association of Energy and Water Industries (BDEW) broadly welcomed the package, saying it provides clarity for grid operators. But the German Environmental Aid (DUH) and the New Energy Industry Association (BNE) countered that the reforms shift the burden of insufficient grid expansion onto renewable energy producers.
Despite the backlash, the economy ministry is holding to its target of 80 percent green electricity by 2030. Biomass capacity has been elevated to 9.5 gigawatts by 2035, and onshore wind is set for 5 gigawatts in both 2027 and 2028, followed by 2 gigawatts in 2029. States and interest groups have until 22 July to submit comments. The cabinet is expected to approve the final text on 29 July.
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