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Germany Advances EEG Reform as Minister Says Household Relief Will Come Only in the 2030s

The cabinet package shifts support toward market-based, time‑limited aid to rein in rising subsidy and grid costs and to steer new projects to sites with existing grid capacity.

Overview

  • On August 5, Economics Minister Katherina Reiche defended a cabinet plan that changes the Renewable Energy Sources Act and a new grid package and said consumers should expect noticeable electricity-price relief only in the 2030s.
  • Key measures in the proposals include ending permanent subsidies for new rooftop solar under 25 kW from 2027, phasing out equal payments for curtailed renewable output, and prioritizing new build where grid capacity exists to lower network expansion costs.
  • Reiche says reform is driven by rising legacy EEG costs — about €17 billion a year now — and by high net charges that result when generation grows faster than timely grid upgrades.
  • Industry groups welcomed the cost-focus as needed to protect competitiveness, while Greens, renewables associations and environmental NGOs warned the changes will slow deployment and raise fossil‑gas reliance; the Mittelstand demanded immediate cuts to the electricity tax for businesses.
  • A Montel Analytics study for BUND found a 2030 system with roughly 80% renewables could sharply cut wholesale prices and volatility through the merit‑order effect, but the analysis notes wholesale falls would not immediately translate into lower retail bills because taxes and network charges still shape household prices.