CfD Mandate 2027 – What PV Investors Need to Know
Excerpt
Starting in July 2027, Contracts for Difference (CfDs) will be mandatory for new PV systems with a capacity of 100 kW or more. As of April 2026, a draft bill has been released, and the CDU/CSU and SPD have agreed on the key provisions. What investors and companies need to decide by the deadline of December 31, 2026—and which strategies will still work after that.
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Germany will mandatorily transition its EEG support system to bilateral Contracts for Difference (CfDs) as of July 17, 2027. This is an EU requirement; there is no national discretion. As of April 28, 2026, a draft bill from the BMWE dated April 21, 2026, is available; the CDU/CSU and SPD agreed on the main points on April 22, 2026—the cabinet decision is now expected in May/June 2026, no longer in March. The most significant change from the working draft of January 22: The buffer corridor (ASW) between the applicable value and the cap has been omitted from the draft bill—the cap applies immediately above the strike price. This creates a clear window of opportunity for investors: Projects commissioned by December 31, 2026, are expected to still fall under the unilateral support framework of the EEG 2023 (20-year term, no refinancing contribution). Those who go into operation after that will operate under the new subsidy system—with guaranteed minimum revenue but a capped high-price upside. The return profile shifts from a volatile 8–13% equity IRR to a stable 8–10%; in return, financing costs decrease and bankability increases. Revenues from storage arbitrage outside the EEG plant remain unaffected. The deadline sprint is no longer realistic for most greenfield projects by 2026 (transformer station delivery time 18–24 months, grid connection 6–24 months)—anyone not already under construction by 2026 is planning for the CfD regime.
Why the 2027 EEG Reform Is Not a Political Choice
Germany must reform its EEG subsidy system by the end of 2026 because the EU state aid approval for the current Renewable Energy Act expires on December 31, 2026, and the Internal Electricity Market Regulation (EU) 2024/1747 will require bilateral difference contracts for new wind, solar, and geothermal support agreements starting July 17, 2027. The question is not whether, but how the CfD model will be structured.
Two constraints are occurring simultaneously:
First: The European Commission’s approval of the EEG under state aid law expires on December 31, 2026—without a new notification, support for renewables would be legally vulnerable as of January 1, 2027.
Second: The revised Regulation on the Internal Electricity Market (Regulation (EU) 2019/943, as amended by Regulation 2024/1747, in force since July 16, 2024) requires that new price support contracts for renewable energy from wind, solar, and geothermal sources must be structured as bilateral spread contracts as of July 17, 2027.
The two deadlines are so close together that it is effectively impossible to extend the current system separately. This leaves German lawmakers with little leeway in terms of the overall structure—but plenty when it comes to the specific details.
The rationale behind this is regulatory: The European Commission wants to prevent electricity customers from bearing the EEG surcharge during periods of high prices—such as in 2022—while plant operators simultaneously benefit indefinitely from exchange prices. The CfD creates symmetry: support in weak years, repayment in strong ones. The reform thus focuses on the market integration of renewables rather than purely promoting volume.
The United Kingdom has been using similar instruments for offshore wind since 2014, and Italy revised its national auction system accordingly last year—Germany is relatively late to the game, but can benefit from these experiences. Contracts for Difference are therefore not unique to Germany, but are becoming the European standard in the electricity market.
CfD Mechanism: How a Contract for Difference Works
A two-way contract for difference (CfD) offsets the difference between a politically set target value (strike price or reference price) and the actual annual market value in both directions. If the market value is low, the government pays the operator a premium; if the market value is high, the plant operator repays a refinancing contribution. The electricity continues to be sold on the market—the CfD is a balancing mechanism, not a fixed-price model.
The basic structure follows the cap-and-floor principle: there is a guaranteed minimum revenue (floor) on the lower end and a cap on additional revenue (cap) on the upper end. Unlike the previous one-sided market premium under the EEG 2023, which only kicked in when prices were low, the two-sided spread contract operates symmetrically. For plants subject to tendering, the applicable value is determined via the BNetzA auction and remains constant as a reference price for the entire 20-year subsidy period. If the market value exceeds this reference price, the difference flows back to the grid operator as a refinancing contribution; if it remains below it, the plant operator receives a top-up as under the old market premium model. For photovoltaic systems starting in 2027, symmetrical risk sharing will thus become the new standard.
Three scenarios, one logic
| Scenario | One-sided support today | CfD starting in 2027 | difference |
|---|---|---|---|
| Low price (market value 3.0 ct/kWh) | The 5.5 ct/kWh premium applies | 5.5 ct/kWh ( same) | ±0 |
| Standard rate (market value 5.5 cents/kWh) | 5.5 cents per kWh | 5.5 ct/kWh ( same) | ±0 |
| High price (market value 7.0 cents/kWh) | Retain the full 7.0 ct/kWh | 5.5 ct/kWh – 1.5 ct/kWh surcharge | −21 % |
| Negativpreis-Phase (Marktwert < 0 ct/kWh) | Exclusion from subsidies for systems of 3 kW or more (EEG 2023) | Ineligibility for funding starting from the first 15 minutes | tightened |
| Sample calculation. The rate of 5.5 ct/kWh used here is for illustrative purposes; the BNetzA maximum rate for ground-mounted solar projects as of the bidding date of March 1, 2026, was 5.79 ct/kWh. Source: BMWE draft bill for EEG 2027 (as of April 21, 2026; under inter-ministerial review as of May 5, 2026), BNetzA, Logic Energy’s own presentation. | |||
During periods of low and normal prices, nothing effectively changes for plant operators and investors. The refinancing contribution applies only in years when the technology-specific annual market value (published on netztransparenz.de) exceeds the applicable value. An operator therefore repays the grid operator only when the market price exceeds the reference price.
The amount of the refinancing contribution depends on how far the annual market value of solar energy lies above or below the reference price—and market values fluctuate widely: in 2022, they were well above any realistic reference price level, whereas in 2024 and 2025, they were clearly below 5 ct/kWh. The cap would therefore only apply in high-price years like 2022; in normal years, the model remains a one-sided top-up mechanism.
Our analysis of the direct marketing of PV electricity describes the historical trends in monthly market values and the underlying structural drivers. Consequently, the economic viability of systems starting in 2027 will not depend solely on the reference price, but rather on the distribution of annual market revenues over the 20-year subsidy period.
Who is affected?
Under the Renewable Energy Act of 2027, this requirement applies to all renewable energy plants with an installed capacity of 100 kW or more that receive EEG subsidies. Specifically:
Ground-mounted solar farms, rooftop systems of 100 kW or more, agri-PV, onshore wind, offshore wind, geothermal energy
Biomass is expressly excluded —operators of bioenergy facilities will retain the unilateral market premium as their subsidy model
Those who operate without support through PPAs or through other marketing channels are not directly affected—but see below regarding the "anti-cherry-picking clause"
The aim of the law is to ensure predictable refinancing for renewable energy plants while limiting windfall profits
Billing: monthly installments, annual final bill based on the annual market value
To understand the impact on existing marketing channels, refer to the in-depth article on the direct marketing of PV electricity, which outlines the current situation without the CfD mechanism. Operators who maximize self-consumption and feed only surplus electricity into the grid will continue to benefit primarily from the electricity they use themselves under the new law—the CfD logic primarily affects systems with high grid feed-in and pure electricity marketing. The support framework for solar and wind power is thus not being abolished, but rather shifted to a two-pronged approach.
As of May 2026: Inter-agency coordination and consultation with associations have not yet begun; Cabinet review has been delayed
As of May 5, 2026, the 2027 EEG Amendment has not yet been adopted. The draft bill dated April 21, 2026, is still undergoing inter-ministerial consultation; the formal consultation with industry associations and the states has not yet begun (Solarserver, April 28, 2026; ZFK Energy Laws Ticker, early May 2026). The cabinet decision has been postponed from the originally announced date in March to an expected date in June 2026—the major EEG reform is not included in the May cabinet schedule. Debate in the Bundestag and Bundesrat is therefore not expected to take place until late summer/fall 2026.
The time pressure is real, but the legislative process is behind schedule. Three stages are currently relevant. The BMWE’s 442-page working draft dated January 22, 2026, was made public on February 26, 2026; it included, for the first time, the 100-kW threshold, production-based levies, and a buffer corridor between the strike price and the levy. This was followed by a draft bill from April 21, 2026, in inter-ministerial consultation—with substantial changes to the mechanism. Finally, the Union/SPD coalition agreement of April 22, 2026, established the basic principles and sent the package out for consultation with industry associations.
According to the BMWE, the consultation with industry associations is set to begin “shortly”; based on past experience, the cabinet decision on the draft bill will follow 4–8 weeks later, after which the legislative process will begin in the Bundestag and Bundesrat. The energy law sector (Görg, Taylor Wessing, Raue, Prometheus) considers the target date of January 1, 2027, for the law’s entry into force to be very ambitious; a postponement to spring 2027 is conceivable if the process is not completed by fall. Federal Minister for Economic Affairs Katherina Reiche is under dual pressure—politically from her coalition partners and regulatory pressure from the European Commission.
| Stage | Date | Status |
|---|---|---|
| EU Regulation 2024/1747 enters into force | 16.07.2024 | Done |
| BMWE Working Draft (442 pages) | 22.01.2026 | Leaked on February 26 |
| Draft Bill from the Federal Ministry for Economic Affairs and Energy | 21.04.2026 | under departmental review |
| Coalition Agreement Between the CDU/CSU and the SPD | 22.04.2026 | Outline established, but no substantive agreement reached (Scheer) |
| Consultation with Associations and States | open | did not start |
| Cabinet decision expected | June 2026 | not included in the May schedule |
| Bundestag/Bundesrat | Summer/Fall 2026 | Uncertain; end-of-July target at risk |
| EEG subsidy approval is set to expire | 31.12.2026 | EU's strict deadline, critical grace period |
| Planned effective date of the EEG: 2027 | 01.01.2027 | Increased implementation risk |
| EU requirement for two-way CfDs | 17.07.2027 | EU deadline |
| Sources: Regulation (EU) 2024/1747 (EUR-Lex) · BMWE Working Draft, Jan. 22, 2026 · Ministerial Draft, Apr. 21, 2026 · Coalition Agreement, Apr. 22, 2026 · Solarserver, April 28, 2026 · ZFK Energy Laws Ticker, early May 2026 · As of May 5, 2026. | ||
What is considered a political given: The introduction of CfDs is mandated by EU law, and the principle itself is non-negotiable. The 100-kW threshold, the corridor, and the transitional rules may still change during the legislative process—deviations from the current draft bill are explicitly expected. In doing so, lawmakers must balance two objectives simultaneously: providing predictable investment conditions for plant operators while protecting electricity customers from windfall profits during periods of high prices.
The energy law sector (Görg, Taylor Wessing, Raue, Prometheus) considers the target date of January 1, 2027, to be very ambitious; a postponement to spring 2027 is conceivable if the parliamentary process is not completed by fall. Uncertainties regarding the specific details could also delay the new law’s entry into force.
Status of the Consultation with Associations and States
Negative findings as of May 5, 2026: The formal consultation with industry associations and the states has not yet begun (Solarserver, April 28, 2026; ZFK Energy Laws Ticker, early May 2026). BSW Solar (press release April 22 & 23, 2026), BEE (April 22, 2026), BDEW (press release February 27, 2026, still valid), and Stadtwerke München (April 28, 2026) have nevertheless publicly stated their positions. Starting May 6, 2026, the Environmental Energy Law Foundation will launch a weekly online seminar series on the EEG 2027—effectively a shadow consultation for the industry, since the BMWE has not yet opened an official consultation channel.
For investors, this creates a twofold risk of delays: inter-ministerial coordination, consultations with industry associations, and notification of EU state aid must all be completed by December 31, 2026. With every week that the consultation process is delayed, the time buffer for the Commission’s review in Brussels shrinks.
What specifically has changed from the working draft
The BMWE’s draft bill of April 21, 2026, tightens the original working draft in three respects: The buffer range between the applicable value and the levy has been eliminated; the zero-hour rule for negative electricity prices now applies starting from the first quarter-hour; and there is a new six-month deadline for selecting a feed-in tariff, plus an anti-cherry-picking clause that prevents flexible switching between EEG feed-in tariffs and PPAs.
Buffer corridor (ASW parameter) – not applicable
The January working draft included a buffer zone (ASW parameter) between the strike price and the start of the cap. According to Prometheus (April 22, 2026), this buffer zone is no longer included in the current draft. The levy mechanism thus begins immediately above the reference price, with no tolerance range. Industry associations (BSW Solar, BNE, BEE) sharply criticize this tightening because it exacerbates strategic bidding behavior and risk premiums in auctions—they view this as one of the key changes from the original draft bill that harms the investment climate.
Stricter zero-hour rule in the event of negative prices
Negative spot prices in Germany reached an all-time high in 2025, totaling 573 hours across 110 days (Source: BHKW-Infozentrum/SMARD, March 11, 2026; compared to 457 hours in 2024 and just 69 hours in 2022). The lowest spot price in 2025 was well below −200 €/MWh — details and complete statistics in the NEGS article. The draft responds to this shift in the electricity market: the subsidy exclusion now takes effect as early as the first negative quarter-hour (previously a 3-hour rule in the EEG 2023, a 4-hour rule in the EEG 2021); this is offset by extending the subsidy period by the number of lost quarter-hours.
When spot prices are low but positive, a minimum revenue clause of 0.5 ct/kWh applies on a quarter-hourly basis to prevent curtailment. These rules apply to all photovoltaic systems with a capacity of 100 kW or more and are among the regulations with the greatest impact on actual revenue. The regulatory mechanisms behind this are explained in the in-depth article on negative electricity prices and PV investors.
Escalation in early May 2026 shifts the political debate
Am 1. und 2. Mai 2026 fielen die Day-Ahead-Spotpreise zeitweise auf das technische Minimum von −499,99 €/MWh; Deutschland exportierte 41 GWh (1.5.) und 33 GWh (2.5.). Wirtschaftsministerin Katherina Reiche bekräftigte am 04.05.2026 im CDU-Wirtschaftsrat die Streichung der Einspeisevergütung für Anlagen <25 kWp; Bundeskanzler Friedrich Merz unterstützt die Reiche-Linie öffentlich. Die SPD-Position (Nina Scheer, Carsten Schneider) bleibt kritisch, ist innerhalb der Koalition aber weniger durchsetzungsfähig geworden.
Implications for the zero-hour rule: The likelihood that Section 51 of the EEG 2027 Draft will pass through the legislative process unchanged has increased since early May. Investors should factor in the strictest version when planning their revenue.
6-month period and anti-cherry-picking clause
Plants not subject to a tender requirement must declare within 6 months of commissioning whether they wish to claim subsidies—otherwise, the plant operator’s entitlement is permanently forfeited. More importantly, the anti-circumvention clause provided for in § 21a(2) ensures that the refinancing contribution applies even in cases of alternative marketing, as long as no formal opt-out has been declared. The previously available option to switch between subsidized and other forms of marketing on an annual basis is no longer available. Anyone wishing to opt out must do so once, completely, and irrevocably—within the first 10 years of operation.
These stricter rules force operators to make strategic decisions earlier than under the old subsidy system. While the current draft bill provides planning certainty for the government, it significantly restricts the flexibility of plant operators under the new Renewable Energy Act. Anyone who wants to switch flexibly between self-consumption and feeding into the grid should design the system configuration and load profile with this in mind from the very beginning. Even systems currently under construction will be subject to new framework conditions under the law’s transitional rules—even if they go into operation under the EEG 2023.
Grandfathering of CfDs and the deadline of December 31, 2026
Photovoltaic systems commissioned by December 31, 2026, are expected to fall under the unilateral subsidy framework of the EEG 2023—for the full 20-year subsidy period, without a refinancing contribution. The decisive factor is the technical commissioning in the market master data register, not the award of the tender. The EU regulation explicitly covers only new feed-in tariff contracts effective July 17, 2027, or later.
The legal basis is sound: Article 14 of the German Basic Law (protection of property rights) safeguards reliance on existing feed-in tariff commitments, and EU Regulation 2024/1747 explicitly applies only to new price support contracts. Retroactive application of new CfDs to existing photovoltaic systems would be constitutionally untenable—this applies both under the old Renewable Energy Act and under the amended Act effective from 2027.
However, the transitional provisions for projects awarded in the 2025/2026 tenders but scheduled for completion in 2027/2028 have not yet been definitively addressed in the draft bill. This represents the key risk factor for large-scale projects with long implementation timelines—one of the most critical outstanding issues that must still be resolved during the parliamentary process. For operators with a grid connection commitment but a later commissioning date, this creates a planning gray area that affects the investment timeline. Subsequent amendments to the law during the Bundestag deliberations are also possible and would apply here.
What is still realistically achievable by 2026
Anyone who still wants to meet the December 31, 2026, deadline must complete technical commissioning by the end of the year. This is feasible—but only with a secured grid connection agreement, existing BImSchG or BauGB permits, and a signed EPC contract by Q1 2026 at the latest. Unlike for later photovoltaic systems under the new CfDs, market revenues for systems commissioned on time will still be paid according to EEG logic, without a refinancing contribution. Three bottlenecks are critical, particularly the grid connection and the availability of medium-voltage technology. For any operator still building today, the interplay of legislation, grid connection, and delivery times is the critical factor:
| bottleneck | Delivery time | Risk Assessment |
|---|---|---|
| Medium-voltage substation | 18–24 months | critical |
| Grid connection (distribution network) | 6–24 months | critical |
| System Certificate (FGW TR8 for systems 135 kW and above) | 6–12 months | medium |
| inverter | 6–9 months | medium |
| PV modules (TOPCon, glass-glass) | 2–4 months | uncritical |
| Market data for Q2 2026 for large-scale commercial/industrial systems. Transformer delivery times: Siemens Energy, Hitachi Energy, GE Vernova, Schneider Electric. Source: Logic Energy’s own research, BSW Solar Q1 2026, market quotes. | ||
The bottom line is clear: Plant operators who have not yet signed an EPC contract or ordered a transformer by Q2 2026 will most likely miss the deadline. The majority of greenfield photovoltaic plants are already planning for the CfD regime starting in 2027—not least because the expansion of distribution grids in many regions is lagging behind demand.
Three Strategies for Commercial PV Investors in 2026
Based on the key regulatory parameters under the EEG 2027, three clear strategies emerge for investors in 1–50 MW PV plants: the deadline sprint for CfD grandfathering, the CfD-Ready strategy for commissioning in 2027/2028 with optimized site and storage selection, and the PPA-Pure approach via opt-out and industrial customers. The choice depends on the project’s maturity, the profile factor at the site, and access to industrial customers.
Strategy 1 — Deadline Sprint
This is only advisable if a grid connection is secured, the necessary permits are in place, and an EPC contract is signed by Q1 2026 at the latest. Ordering a substation by mid-2025 was the last opportunity to get started—plant operators who have not yet begun construction have a realistic 5–10% chance of achieving commissioning by December 31, 2026. Advantage: 20 years of unilateral EEG subsidies without a refinancing contribution, full high-price option premium. Disadvantage: Negotiate contractual penalties for delayed commissioning.
Strategy 2 — CfD-Ready
The majority of the major projects planned today fall into this category. Site selection becomes a decisive factor: Southern and Central Germany, where solar has a high profile factor; storage integration is virtually standard, improving the profile factor by 5–15 €/MWh. Bid just below the expected maximum in auctions—the maximum for the open-field tender on March 1, 2026, was 5.79 ct/kWh; for 2027, an increase to 6.0–6.5 ct/kWh is realistic due to capex inflation.
Strictly adhere to the 6-month deadline for submitting the funding selection declaration under IBN. Those who incorporate the new rules early in the project design will benefit from the CfD model rather than suffer from it—photovoltaic systems with a high proportion of south-facing panels and storage fare significantly better under the new funding system than purely east-west systems without flexibility. The economic rationale for storage integration and IRR effects are detailed in PV Storage 2026: Co-location for Returns and Economic Viability.
Strategy 3 — PPA-Pure
Suitable for projects with investment-grade industrial customers and a load profile dominated by daytime demand. A 10-year pay-as-produced PPA in Germany stands at around €55/MWh in Q1 2026 (LevelTen Continental Index), with a downward trend. Bank requirements are stringent: 35–45% equity, min-DSCR 1.30–1.45×, P90/P10 merchant tail assumptions. Revenues from the PPA flow directly from the industrial customer, without any refinancing contribution and without reference to the traditional EEG subsidy pool—the plant operator acts as a pure market player in the electricity market.
Important: Opting out of the CfD system is only possible during the first 10 years of operation; it is a one-time, irrevocable decision—the choice must be made early and is final. Hybrid marketing models (PV combined with BESS) are gaining market share because industrial customers are increasingly demanding green electricity profiles that include storage and self-consumption components. A reliable grid connection with sufficient feed-in capacity remains a prerequisite—without stable access to the grid, no PPA model can function.
| Criterion | Deadline Sprint | CfD-Ready | PPA-Pure |
|---|---|---|---|
| Commissioning | through December 31, 2026 | starting in 2027 | Starting in 2027 (with an opt-out option) |
| Funding scheme | EEG 2023, 20 J. | 20-Year Differential Contract | No EEG subsidies |
| High-price upside | full | capped | PPA-fix, remaining quantity free |
| Low-Price Guarantee | full | full | PPA risk |
| Bankability | high | very high | medium (PPA credit rating) |
| Is that realistic by 2026? | only if construction begins in 2025 | Default path | for industrial customers |
| Logic Energy’s internal analysis based on the BMWE draft bill dated April 21, 2026, BNetzA auction results for Q1 2026, and the LevelTen Q1 2026 European PPA Index. All return figures are for illustrative purposes only and do not constitute investment advice. | |||
Revenue Model: What CfD Means for a 5-MW Project
Under the new subsidy model, the return profile of a typical 5-MW ground-mounted photovoltaic plant shifts from a volatile 8–13% equity IRR profile to a stable 8–10% profile. In return, financing costs decrease by approximately 50–100 basis points, the potential debt-to-equity ratio increases from 60% to up to 75%, and DSCR requirements are relaxed. For plant operators, the risk profile thus becomes bond-like.
A model calculation for a 5-MW ground-mounted system with 1,050 full-load hours and an annual output of 5,250 MWh illustrates the effect. Assumptions: Capex €800/kWp = €4.0 million, Opex €12/kWp/year = €60,000/year, reference price 5.3 ct/kWh, 0.5% degradation per year.
| Key figure | EEG 2023 (single-sided) | CfD starting in 2027 |
|---|---|---|
| Revenue range | €50–80/MWh (volatile) | €53/MWh (deterministic) |
| Project IRR (unleveraged) | 5.5–7.0% + premium for high-priced options | 5.5–6.5% |
| Equity IRR (75% debt) | 8–13% (volatile) | 8–10% (stable) |
| Possible debt-to-equity ratio | ~60 % | ~75 % |
| Min-DSCR | 1.15–1.25× | 1.10–1.20× |
| Logic Energy model calculation. Past performance is not indicative of future results. Capex: €800/kWp, Opex: €12/kWp/year, feed-in tariff: 5.3 ct/kWh, 1,050 full-load hours, 0.5% degradation. Source of EEG auction values: BNetzA, bidding deadline: March 1, 2026. | ||
The frequently cited DIW argument that CfDs could reduce electricity generation costs by up to 30% (DIW Berlin Weekly Report 35/2022) is based on more favorable financing terms—lower WACC, higher debt-to-equity ratio—and represents a societal benefit. For individual operators, the same model translates to lower margins per MWh but more stable financing. In practice, half of the theoretical cost savings are recouped through strategic bidding behavior in auctions; a 10–20% reduction in LCOE is realistic with a well-designed CfD. Revenues become more predictable, but high-price peaks are eliminated—net of this, the profile factor determines whether market revenues fall above or below the reference price.
Important for the assessment: The solar profile factor—that is, the ratio between solar power sales revenue and the average baseload electricity price—has fallen structurally in recent years because the growing solar generation profile is driving down midday prices. Our article on the European solar schism examines the mechanics behind this and its implications for European solar investments. If the profile factor continues to fall, the model will function structurally as a pure top-up mechanism rather than a skimming instrument—a refinancing contribution would only be required in crisis years such as 2022.
What the CfD requirement means for companies with their own power plants
For companies that install a photovoltaic system primarily to optimize self-consumption, the CfD requirement is less relevant—self-consumption is not subject to the refinancing contribution. It only becomes critical for surplus feed-in from systems of 100 kW or more. For PPA models without equity, nothing actually changes: fixed solar power prices of 11–13 ct/kWh fall outside the scope of the EEG.
Commercial or industrial businesses that install a photovoltaic system for their own electricity supply should clearly distinguish between two mechanisms. Electricity used for self-consumption is not remunerated under the EEG and is therefore not subject to the refinancing contribution — System operators who consume a significant portion of their solar power themselves have a clearly superior economic case there (avoided grid procurement of 25–35 ct/kWh instead of EEG remuneration of 7.78 ct/kWh, as of February 1–July 31, 2026, for ≤10 kWp partial feed-in).
Our guide to PV systems with battery storage covers typical self-consumption rates with storage and the associated economic viability. Self-consumption thus remains the most economically attractive form of use even under the new subsidy system—and is the only lever companies can use to reduce their electricity costs immediately and in the long term. Excess feed-in from systems with a capacity of 100 kW or more, on the other hand, will be subject to the new net metering contract requirements starting in July 2027—which would lead to a net metering cap in years with high electricity prices but remains irrelevant in normal years. For smaller photovoltaic systems under 100 kW, the new rules do not apply at all; here, the simplified self-consumption model remains unchanged.
For PPA models without equity—that is, purchasing solar power from a system installed on one’s own roof at a fixed price over 20 years—nothing changes at all. The PPA operates outside the scope of EEG subsidies; the refinancing contribution does not affect this model. For a detailed overview of the mechanics of the lease and electricity supply model, see the article “Solar Power Without Equity: PPA & On-Site Contracting for Commercial Customers.”
The strategic implication for businesses: Self-consumption systems can still be built after 2027 without compromising profitability—the incentive structure is shifting from "feeding as much as possible into the grid" to "maximizing the share of self-consumption." For many operators, this means above all that the sizing of the photovoltaic system is based on the actual load profile, rather than on the maximum feed-in volume.
This also puts the importance of grid feed-in into perspective: Those who intelligently combine self-consumption with load management are largely decoupled from the specific parameters of the CfD. Anyone wishing to combine self-consumption systems with investor capital should understand the investor model: In the Logic Energy investor model, the investor provides the inverters, and the company purchases electricity—a clear separation that works just as well under the new CfD changes as it does under the current EEG subsidy framework.
Criticism from industry groups and realistic risks
Industry associations identify three main risks: a sharp decline in new installations in the residential and small-scale segment (≤25 kW) from around 5 GW to less than 2 GW per year (BSW Solar, statements from February–April 2026); the lack of a PPA framework with an overly inflexible opt-out clause (BNE); and the burden placed on combined PV-storage projects (BEE). Added to this are the unresolved details of the resilience tenders for grid-connected photovoltaic systems, which are currently only outlined in the draft bill, as well as the structural tightening of bankability requirements—equity requirements have risen from 20% to 40% within 1.5 years.
Since the first leak of the draft bill in late February 2026, the German Solar Industry Association (BSW Solar) has repeatedly warned of a market collapse. BSW CEO Carsten Körnig clearly articulates this concern: if feed-in tariffs are eliminated, new installations in the residential and small-scale segment (≤25 kW) could plummet from around 5 GW to less than 2 GW per year (Source: BSW press release “Solar Industry Warns of Devastating Cuts” dated February 26, 2026, and “EEG Plans Threaten Solar Expansion” dated April 23, 2026). A historical precedent is the subsidy cut in 2012/2013, which halved total PV expansion from 7.6 to 3.3 GW.
Early indicators are already apparent: In the residential segment, approximately 8 GW of photovoltaic systems were installed in 2023, but only about 5 GW in 2025—a 43% decline in the number of systems over two years (793,800 → 453,800 systems, source: BSW analysis of the Market Master Data Register, January 2026). The February 2026 solar rooftop tender was significantly undersubscribed, with 177 MW in bids for a 283 MW volume (BNetzA press release, March 31, 2026).
Das Q1 2026 verschärft den Trend mit harter Datenbasis (BSW-PM 'Schwacher Photovoltaik-Jahresauftakt' vom 02.05.2026, MaStR-Stichtag 23.04.2026): Gesamtmarkt 3,51 GWp (−6 % YoY), Heimsegment <30 kWp ~0,85 GWp (−21 %), Gewerbedach >30 kWp ~0,60 GWp (−33 %), Freifläche und sonstige ~1,97 GWp (+20 %). Bei linearer Extrapolation läuft das Heimsegment auf ~3,4 GW Jahreszubau zu — weiter weg von den 5 GW (2025) und in Richtung der von Carsten Körnig prognostizierten <2-GW-Risikozone bei vollständigem Förderwegfall. Die Förderankündigung wirkt empirisch bereits vor Inkrafttreten des Gesetzes als negativer Vorzieheffekt.
Even municipalities that have focused on decentralized expansion in recent years are feeling the uncertainty caused by the planned changes to the Renewable Energy Act—according to industry associations, community energy projects are under particular pressure. The regulatory changes are hitting residential solar systems and smaller commercial projects especially hard, as their economic viability collapses without feed-in tariffs.
The German Association for New Energy (BNE) criticizes the lack of a coherent PPA framework and calls for an opt-in rather than an opt-out approach to prevent the decarbonization PPA market from drying up. The German Renewable Energy Federation (BEE) warns that the levy on combined PV-storage projects could undermine the economic viability of the storage components. Operators of large-scale projects also complain that the planned resilience tenders for grid-supporting and system-relevant sites are only outlined as a concept in the current draft, but have not been worked out in operational detail.
The shift in bankability is more structurally significant: equity requirements for PV project financing have doubled from 20% to around 40% within 1.5 years—even before the CfDs took effect (source: industry reports, Q1 2026). A higher debt-to-equity ratio for Contracts for Difference comes at the expense of return on equity; risk-adjusted equity IRR declines by 50–150 basis points compared to today’s one-sided subsidy model. International project financiers such as UniCredit, ING, and Rabobank generally consider Contracts for Difference to be bankable; a shift in the investor landscape toward institutional pension mandates with low volatility is foreseeable. Plant operators of large-scale projects tend to benefit from this stabilization because it makes refinancing over longer terms more predictable—even if the prospect of high prices is no longer a factor.
The solar industry is clearly responding by diversifying into Europe—Italy is becoming more attractive under its FER-X CfD auction regime, as detailed in the market analysis *PV Investment Italy 2026 *. Italian CfDs (FER-X), TIDE, and MACSE together form a framework that is, in some respects, more predictable for investors than the German draft. As of April 2026, no constitutional challenges against the German CfD have been announced; the Environmental Energy Law Foundation sees scope under European law for production-independent mechanisms but has not published a specific constitutional study.
For plant operators and project developers, this leaves a twofold task in the context of the EEG reform: the goal is not to oppose the new subsidy model, but to help shape it constructively. The associations are focusing on four key elements of the draft bill: the reintroduction of a buffer corridor, raising the 100-kW threshold, clear transition rules for plants that have been awarded contracts but not yet built, and an operationally detailed design of the resilience tenders for grid-connected photovoltaic plants. If these changes are incorporated into the legislative process, uncertainty will decrease—and with it the risk premium that banks and investors factor into renewable energy investments. Revenues from CfDs would then be more reliably calculable than under the current volatile electricity price regime.
The call to raise the CfD threshold from 100 to 200 kW comes from the BDEW and BNE and is supported by EU law: The Internal Electricity Market Regulation permits a CfD exemption for installations up to 200 kW (Art. 19d of Regulation 2019/943, as amended by 2024/1747). However, in the draft bill dated April 21, 2026, the threshold remains at 100 kW. An increase during the parliamentary process is possible but unlikely, as the Reiche line aims for maximum market integration. If the SPD parliamentary group and Schneider force a compromise here, smaller commercial rooftop projects in the 100–200 kW range will benefit primarily.
This article is intended solely to provide general information about regulatory developments and does not constitute investment, tax, or legal advice. The regulations described are based on the leaked BMWE working draft (as of January 22, 2026), the draft bill of April 21, 2026, and the Union/SPD coalition agreement of April 22, 2026—and do not yet constitute enacted law. Changes during the legislative process are expressly to be expected.
Return and revenue figures are based on model calculations and historical data; they do not constitute a guarantee of future results. For advice regarding your specific investment, tax, or legal situation, please consult a licensed financial, tax, or legal advisor. All information is provided without warranty. As of April 2026.
Note: As of May 5, 2026, the award results for the BNetzA bidding round for ground-mounted solar projects on March 1, 2026 (maximum price 5.79 ct/kWh, volume 2,295 MW) have not yet been made public; publication is expected in mid- to late May 2026. According to the BNetzA auction mechanism, the maximum price for the July 1, 2026, auction is typically set 4–6 weeks in advance—that is, in late May/early June 2026.
The 2026 regulatory deadline is real—operators and investors who still want to meet the December 31, 2026, deadline must begin construction this year. Those who cannot do so should start planning immediately for CfD-compliant photovoltaic systems with a high proportion of self-consumption and a stable grid connection. To PV investment →
Take action instead of waiting
The 2027 CfD requirement represents the most significant regulatory shift in the renewable energy support system since the introduction of the sliding market premium in 2012—and it affects every large-scale project that is not connected to the grid by New Year’s Eve 2026. Logic Energy designs and builds PV systems through active site acquisition, secured financing prior to construction, and inverter revenue sharing over 20–40 years.
If you’d like to know what the next 8 months will mean for a specific project—whether it involves meeting a deadline, selecting a CfD-ready site, or a PPA option with an industrial buyer—we’d be happy to discuss it with you with no obligation. Thanks to the personal liability of mediplan Helm e.K., this isn’t just an anonymous consultation, but a concrete, well-founded assessment.
FAQ
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A two-way contract for difference (CfD) is a support mechanism in which the difference between the politically set strike price and the actual annual market price is settled in both directions. In years with low prices, the operator receives a market premium as is currently the case; in years with high prices, the operator pays back a refinancing contribution. The electricity continues to be sold on the market—the CfD is a balancing mechanism, not a fixed price.
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According to the current draft bill from the Federal Ministry for Economic Affairs and Energy (BMWE) dated April 21, 2026, the refinancing contribution applies to all renewable energy plants with an installed capacity of 100 kW or more that apply for EEG subsidies. Biomass is excluded. The BDEW and BNE are calling for an increase to 200 kW; the final threshold may still change during the parliamentary process.
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The current draft dated April 21, 2026, tightens the original proposal in three key areas: The buffer corridor between the reference price and the refinancing contribution has been eliminated; the zero-hour rule for negative spot prices now applies starting from the first negative quarter-hour; and there is a six-month deadline for selecting a subsidy option, plus an anti-cherry-picking clause that prevents flexible switching between EEG subsidies and PPAs.
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No. Existing photovoltaic systems are protected by the principle of legitimate expectations for their entire 20-year EEG feed-in tariff period. The EU regulation explicitly applies only to new feed-in tariff contracts entered into on or after July 17, 2027. Systems commissioned by December 31, 2026, are expected to be covered—however, the exact transitional provisions for projects awarded in 2025/2026 and to be implemented in 2027/2028 have not yet been finalized in the current draft.
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The target date is January 1, 2027. As of May 5, 2026, however, the EEG reform is not included in the cabinet’s May schedule (ZFK Energy Laws Ticker, early May 2026); the timeframe of “Bundestag by the end of July 2026,” which Roedl & Partner described as realistic, is increasingly at risk. A postponement to spring 2027 is possible. Investors with a target commissioning date of December 31, 2026, should treat this date as binding.
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Yes—the new subsidy structure changes the risk-return profile, but does not eliminate it. The equity IRR shifts from a volatile 8–13% to a stable 8–10%. DIW Berlin sees potential for an LCOE reduction of up to 30% due to more favorable financing terms; a reduction of 10–20% is realistic. Logic Energy offers direct investments with a 6–10% p.a. return starting at a minimum investment of €100,000 and a share in inverter revenue over 20–40 years.
These figures are based on model calculations using assumptions regarding the draft bill dated April 21, 2026, and do not guarantee future results. Individual profitability depends on the size of the system, its location, the type of incentive selected, and the final version of the law. As of May 5, 2026.
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Not much. Electricity for self-consumption is not subject to the refinancing contribution—those who consume a significant portion themselves (see the BATT Guide for details and storage cost-effectiveness) are only subject to the CfD regime for the remaining electricity volume starting at 100 kW of installed capacity, and even then only in years with high electricity prices. For PPA models without equity, in which an investor builds the plant and the company purchases electricity at a fixed price, nothing changes—the PPA operates outside the scope of EEG subsidies.
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Negative Findings as of May 5, 2026: As of the date of this update, the formal consultation with industry associations and state governments had not yet begun (Solarserver, April 28, 2026; ZFK Energy Laws Ticker, early May 2026). Nevertheless, BSW Solar, BEE, BDEW, and Stadtwerke München have publicly stated their positions; the Foundation for Environmental Energy Law is launching a weekly online seminar series on May 6, 2026.
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Yes: On May 1–2, 2026, day-ahead spot prices temporarily fell to the technical minimum of −499.99 €/MWh. On May 4, 2026, Minister of Economic Affairs Reiche reaffirmed the elimination of feed-in tariffs at the CDU Economic Council; Chancellor Merz publicly supports Reiche’s position. The SPD’s position remains critical, but it has less influence within the coalition.
References
EUR-Lex — Regulation (EU) 2024/1747 · June 13, 2024 · in force since July 16, 2024
GÖRG — Draft of the EEG 2027 · March 9, 2026
Taylor Wessing — EEG 2027 at a Glance · March 2026
Raue LLP — Transition to Bilateral Differential Contracts · March 2026
Prometheus Law — EEG 2027: A New Era · April 22, 2026 (with update on the draft bill)
pv magazine — Leaked EEG Draft · February 27, 2026
BNE — EEG 2027 and Grid Package · February 27, 2026
DIW Berlin — Differential Contracts Promote Expansion · Weekly Report 35/2022
Environmental Energy Law Foundation — EEG 2027 · Ongoing Project 2026
BNetzA — Call for Bids: Open-Space Solar Projects, March 1, 2026
Netztransparenz.de — Solar Market Value Overview · Updated monthly
CHP Information Center — Negative Electricity Prices in 2025: 573 hours · As of March 11, 2026
Rödl & Partner — 2027 Amendment to the Renewable Energy Act · March 26, 2026
Becker Büttner Held — EEG 2027 CfD · April 7, 2026
BSW Solar — Solar Industry Warns Against Drastic Cuts to Solar Expansion · Press Release, February 26, 2026
BSW Solar — EEG Plans Threaten Solar Expansion and Jobs · Press Release, April 23, 2026, with a representative YouGov survey
As of April 28, 2026. The specific details of the transition period, transitional rules, and opt-out flexibility remain subject to change until the Bundestag makes its decision.
