Challenges to Reich's Proposals for Smaller Solar Energy Facilities
Germany is currently embroiled in a heated debate about the future of its renewable energy sector, with Federal Minister of Economics Katherina Reiche's plans to phase out state support for new small solar photovoltaic (PV) installations causing a stir. Critics argue that this move could undermine Germany's climate goals, hinder the solar industry, and slow the energy transition.
At the heart of the controversy is Reiche's proposal to end direct state support for new small residential and commercial solar PV installations. The minister argues that these systems are becoming increasingly cost-competitive and may no longer need subsidies. However, renewable energy advocates, industry stakeholders, and some political figures warn that removing subsidies risks slowing down solar expansion.
The solar industry, which employs around 150,000 people, is particularly concerned. The Federal Solar Industry Association has criticized Reiche's plan, stating it would endanger climate goals and harm the industry. Solar capacity growth is vital for Germany to reach its ambitious climate targets, including climate neutrality by 2045 and 80% renewable electricity by 2030.
Concurrently, Reiche is pushing for accelerated construction of new gas-fired power plants with state support, aimed at providing reliable backup electricity during periods of low wind and solar generation. This approach has been criticized for potentially prolonging fossil fuel dependence and complicating the energy transition.
The plan includes a “south bonus” to encourage gas plant construction primarily in southern Germany, which has less renewable capacity than the north. This regional focus has sparked dissatisfaction among workers and local stakeholders in lignite-heavy regions like Lusatia, who fear being left behind.
The German government remains committed to climate neutrality and implementing the Paris Agreement but balances these goals with concerns over electricity prices, industrial competitiveness, and energy security. Critics view Reiche’s proposals as potentially slowing renewable energy momentum critical for long-term emissions reductions.
Major energy players such as Vattenfall and Germany’s Bundesbank advocate continuing and scaling up renewable energy expansion, warning against policy shifts that could compromise the transition or increase reliance on fossil fuels.
The Federal Solar Industry Association is demanding consistent action on energy transition tasks, including the expansion of photovoltaics, storage, and grids. Energy Minister Rich Wealth is seeking a policy shift in the energy transition, aiming to reduce costs and increase controllability. Wealth's predecessor, Robert Habeck (Greens), had pushed forward the expansion of renewable energy, especially from wind and solar.
Sven Giegold, deputy Green Party leader, has warned that Reiche's policy has many losers, including municipalities, companies, farmers, and climate protectors. The CDU politician does not want to change the feed-in tariff for existing solar installations, citing the protection of existing systems.
An analysis by the German Institute for Economic Research shows that the boom in solar energy in Germany is making it difficult to control the power grids, potentially leading to temporary bottlenecks. The association claims that only four out of ten customers would install a solar power system without support. Renewable plants are often throttled back due to lacking grids, resulting in high compensation costs for grid congestion.
Reiche argues that new, small PV systems are already profitable in the market and do not require support. The Ministry of Economics is continuously reviewing and reforming the promotion of renewables, according to a spokesperson. Reiche suggests that PV systems should be connected to storage and be controllable, participating in the market and selling their power.
The SPD (Social Democratic Party) has expressed concerns about unsettling the market with Reiche's policy. The Greens have called for protests against Reiche's policy, adding to the mounting pressure on the minister to reconsider her proposals.
Wealth plans to present a "reality check" on the energy transition by the end of the summer, which could provide further insight into the government's plans for the future of renewable energy in Germany.
The solar industry, which employs around 150,000 people, expresses concern over Federal Minister of Economics Katherina Reiche's proposal to end direct state support for new small residential and commercial solar PV installations, stating it would endanger climate goals and harm the industry. Solar experts, including Vattenfall and Germany's Bundesbank, advocate for continued and scaled-up renewable energy expansion, warning against policy shifts that could compromise the transition or increase reliance on fossil fuels.
