Germany's government proposes cutting support for new solar and wind projects in grid-congested areas, including lower feed-in tariffs for rooftop solar and reduced curtailment compensation, sparking industry criticism ahead of a 29 July cabinet decision.
The German government has proposed measures to curtail financial support for new solar and wind energy projects in areas facing power grid constraints, aiming to ease network overload and lower overall costs.
Industry groups and state authorities have been asked to comment on the initiative, which includes cutting subsidies for small rooftop solar installations and reducing compensation for larger renewable facilities that are required to shut down during periods of grid strain.
Revisions to Germany's Renewable Energy Act (EEG) are required before the current support scheme expires at the end of 2026. The changes would also bring the framework in line with updated European Union state aid rules that require the clawback of windfall profits from 2027 onward.
Germany's longstanding guarantee of priority grid access and payment for renewable projects has driven the energy transition, though expansion of the transmission network has lagged behind the rapid increase in renewable capacity.
The Federal Association of the Energy and Water Industries (BEE) and the German Solar Association (BSW-Solar) criticized the proposed EEG amendments and related grid measures, warning that they could jeopardize billions of euros in investments and put tens of thousands of jobs at risk. BEE president Ursula Heinen-Esser described the drafts as a significant reversal for renewable energy development.
Compared with earlier versions, the proposals sent for consultation are less restrictive. New projects in constrained areas would receive automatic grid connection only if developers agree to forgo compensation during curtailment periods. The definition of such areas has been adjusted to those where at least 5 percent of the previous year's electricity generation could not be fed into the grid, up from 3 percent.
The period during which developers must waive payments for curtailed power has been shortened to six years from ten. Additionally, the share of annual output subject to uncompensated curtailment would be capped at 10 to 20 percent.
From 2027, small rooftop solar systems would continue to receive a feed-in tariff during their first three years of operation, albeit at lower rates than today. Earlier ideas had considered ending guaranteed payments altogether. Support levels would be phased down further through 2030.
Stakeholders were given just three working days to submit responses, a deadline they called insufficient for reviewing legislation of this scope.
The reform packages emerged from extended negotiations within the government. They form part of the economy ministry's push to improve the cost-efficiency of the energy transition and better align renewable growth with available grid capacity.
Economy Minister Katherina Reiche, from Chancellor Friedrich Merz's CDU party, stated that renewable developers should bear the financial risks associated with curtailment. She added that small-scale solar technology has reached market maturity and no longer needs subsidies. The renewable sector recognizes opportunities to enhance transition efficiency but cautions that the changes could slow the expansion of wind and solar power.
Germany aims to generate 80 percent of its electricity from renewable sources by 2030. The cabinet is scheduled to approve the reforms on July 29 before sending them to parliament.
Originally reported by IndexBox on Jul 23, 2026.
