Germany's energy transition nearing max: electricity costs soar to new highs
In a move that could potentially reshape the renewable energy landscape in Germany, the Minister of Economics, Katherina Reiche (CDU), has proposed the complete abolition of feed-in remuneration for private solar plants.
Reiche's proposal comes amidst concerns about the slowing pace of the renewable energy transition in the photovoltaics sector. The Minister aims to steer the focus towards addressing the upcoming tasks of the energy transition, such as storage and grid expansion.
However, the Federal Association of Solar Industry has criticised Reiche's proposal, stating that it could endanger climate goals and significantly harm the industry, which employs approximately 150,000 people.
The issue of negative electricity prices in Germany, where power producers have to pay money for someone to take their fed-in electricity during these periods, has highlighted the need for further policy action in the area of renewable energy. In 2025, there were 465 cumulative negative price hours up to and including August, with 64 hours in August alone. This exceeded the total for the entire previous year.
The problem of negative electricity prices indicates that the power grid in Germany is reaching its limits. During times of low wind and sun, exchange electricity prices have skyrocketed, with 2476 hours this year exceeding 100 euros per megawatt hour.
In an attempt to address this issue, the German traffic light government introduced a law at the beginning of 2025, preventing operators of new photovoltaic plants from receiving feed-in remuneration during times of negative electricity prices.
Reiche, however, intends to maintain the remuneration for existing photovoltaic plants, citing protection of existing rights for homeowners. Most German households do not have dynamic tariffs, but long-term contracts with fixed prices, and therefore do not benefit from negative electricity prices.
The Association has suggested that the government should focus on addressing the challenges of storage and grid expansion, rather than debating the slowing pace of the renewable energy transition. The network expansion in Germany is lagging behind, as are the possibilities for storing excess electricity.
The year 2024 saw a total of 2310 hours when the exchange electricity price was above 100 euros per megawatt hour. As the debate on the future of renewable energy in Germany continues, it is clear that addressing these challenges will be crucial for the country's transition to a sustainable energy future.
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