Germany’s Economy Minister has called for the abolition of feed-in subsidies for new small PV systems
She says such systems are already profitable and no longer need government subsidies
BSW-Solar warns subsidy removal could cut adoption, and urges addressing grid, storage, and investment stability
The German Minister for Economic Affairs, Katherina Reiche, does not see the rationale in providing subsidies to new, small-scale solar PV systems for feeding power into the grid. If implemented, this ruling won’t impact already awarded systems.
In an interview with the local newspaper Augsburger Allgemeine recently, Reiche reportedly said that new, small PV systems are already profitable in the market and hence don’t require any subsidies. She also pointed to the falling prices of solar PV systems to justify her argument.
Currently, homeowners are paid a fixed rate per kWh for rooftop solar power supplied to the grid, guaranteed for 20 years – a policy that has supported the residential solar sector’s growth. According to the news report, under the current regime, a typical 10 kW system is eligible for €0.0786/kWh for feeding excess electricity into the grid. For full feed-in, the tariff is €0.1247/kWh. This could shift if Reiche opts to end the subsidies.
However, the German solar association BSW-Solar has rejected these proposals. Citing a survey of solar installers, the association said that only 4 out of 10 customers would purchase a solar power system in the absence of subsidies.
“To achieve the statutory climate and expansion targets, reliable investment conditions are needed in all photovoltaic market segments. This includes subsidies for solar power that cannot be consumed by the user,” stressed the association.
It says that instead of eliminating subsidies for new solar PV systems on private homes, the government must address the challenges of energy transition, including grid expansion and the addition of storage.
The minister also wants both larger and small-scale solar and wind energy systems to contribute more towards grid expansion, and add storage to their power output to keep the cost of electricity low. It will enable the systems to feed in electricity intelligently. She also wants solar systems to compete in the open market.
However, BSW-Solar pushed back the proposal for higher grid cost contributions from solar system owners. It said that combining solar with batteries, EVs, and other systems uses grid capacity efficiently, reducing the need for costly grid expansion.
Germany’s February 2025 elections handed over power to the conservative alliance led by Friedrich Merz, which recently called for 20 GW of new gas capacity instead of relying on renewables in the country’s energy transition. Reiche wants to accelerate the build-up of ‘flexible’ gas-fired power plants even though these take more time to build.