Katherina Reiche and the Myth of Solar Subsidies: Why Operators Do Not Receive 7 Cents per Kilowatt-Hour in State Support
Münster (Germany) - With the planned phase-out of government support for small solar installations by Federal Minister for Economic Affairs Katherina Reiche, the impression is created that the state could save significant amounts of money. A recent analysis cited by Handelsblatt seems to suggest this. However, this calculation is overly simplistic and does not reflect reality.
The myth of solar subsidies - why operators do not receive 7 cents per kilowatt-hour
The phase-out of subsidies for rooftop solar systems conveys to the public the impression that the state could save massive amounts of money. A central myth is that operators receive, for example, between seven and eight cents per kilowatt-hour directly from the state for photovoltaic systems that partially feed into the grid. This, however, does not correspond to reality. In fact, the EEG (Renewable Energy Act) solar compensation is based on a difference settlement between the market price and a guaranteed minimum remuneration, not a direct subsidy from the federal budget.
Even today, electricity from small photovoltaic systems must be marketed via the electricity exchange under §20 EEG 2023. Marketing is done in 15-minute intervals, currently managed fiduciarily by the grid operators. In the future, the Federal Minister for Economic Affairs intends for these tasks to be taken over by the private operators themselves or by external direct marketers.
Example: Minimum remuneration: 7 ct/kWh Exchange price (15-minute auction): 5 ct/kWh → 2 ct difference is compensated Exchange price (15-minute auction): 9 ct/kWh → 2 ct surplus flows back to the EEG account
If the exchange price in a 15-minute interval falls below the minimum remuneration, the EEG account compensates the difference. If the price is above the minimum, the surplus flows back to the EEG account. This feedback mechanism is almost entirely ignored in public debate. The system is therefore not one-sided in favor of operators but a symmetric settlement. Ultimately, only the net balance of payments and returns is affected, which strongly depends on the electricity price on the exchange.
A short-term relief of the EEG account by abolishing the minimum remuneration for new systems is economically not necessarily significant. The largest cost items still come from older installations from 2006 to 2012 with very high remuneration rates, sometimes over 50 cents per kilowatt-hour, whose obligations are scheduled to expire only after 20 years, i.e., between 2026 and 2032.
Handelsblatt: Only a Very Small Segment Would Actually Save Money
An analysis obtained by Handelsblatt from the think tank Epico and the consulting firm Aurora Energy Research suggests that the reform to end subsidies for rooftop photovoltaics could result in substantial savings. According to the paper, costs for rooftop systems are significantly higher than for ground-mounted systems, particularly regarding grid expansion.
As an example, operators of small systems under ten kilowatts who feed all their electricity into the grid receive a remuneration of around 12.34 cents per kilowatt-hour. These rates are fixed for 20 years. This creates the impression of high government support. In reality, the group of full-feed-in operators—who feed all solar power entirely into the grid—is an extremely small niche. It is also not mentioned that these rates are automatically reduced by about 1% every six months under the EEG.
For most solar system operators, it is economically far more advantageous to use the solar power themselves, as they save the household electricity tariff of around 30 cents per kilowatt-hour. The fixed remuneration for this group of partial feed-in operators is currently between 7 and 8 ct/kWh; there is no remuneration for self-consumed solar power.
Thus, the supposedly high savings affect only the small group of full-feed-in operators who feed all their electricity into the grid without self-consumption. All others, who use their solar power themselves, receive a minimum remuneration of seven to eight cents per kilowatt-hour fed into the grid, while simultaneously relieving the electricity networks through self-consumption or non-feeding.
Why the EEG Account Will Hardly Benefit from the Reiche Plans and Who Gains from the Reform
The elimination of the fixed feed-in tariff for private partial and full-feed-in operators, as pushed by Katherina Reiche, leads to hardly any relief for the EEG account under current market prices. The largest cost items remain the older installations from 2006 to 2012 with remuneration rates over 50 cents per kilowatt-hour, whose long-term obligations phase out gradually.
However, a different aspect is decisive for grid operators: every kilowatt-hour of solar power that is self-consumed avoids network fees. If the fixed feed-in remuneration is abolished and marketing is transferred to the operators, the administrative effort for private solar operators increases.
The result is a decline in new solar installations. Fewer PV systems mean less self-consumption of solar power, more electricity drawn from the grid, and thus higher revenues for grid operators. The planned Reiche reform therefore primarily benefits the large grid companies, while potential private operators are disadvantaged, and the alleged cost savings for the state are only partially realistic.
Source: IWR Online, 12 Mar 2026
