Germany intends to reduce subsidies for renewable energy starting in 2027, following the increase in photovoltaic production that affects the electricity grid.

The German Ministry of Economy has announced a significant revision of the renewable energy subsidy system, considering the increased pressure on the electricity grid due to the expansion of photovoltaic energy production.

According to a draft law, starting in 2027, new renewable energy producers will receive support tailored to energy demand, and feed-in tariffs for recent installations will be gradually eliminated. These changes could slow investments in wind and photovoltaic projects, in the context of rising costs and decreasing revenues. The ministry maintains the goal of increasing the share of renewable energy to 80% by 2030, but grid operators will be able to reduce payments in congested areas.

The legislative project will limit subsidies and introduce a mechanism for recovering excessive profits, bringing the German system closer to the Contracts for Difference model. It is also proposed to eliminate subsidies for photovoltaic installations below 25 kW and to impose battery storage for larger projects. The project is subject to modifications and awaits contributions from stakeholders.