CfD Requirement in 2027: What Will Change for PV Investors?
Starting in July 2027, the EU will transition its support framework for new PV systems of 100 kW or more to bilateral contracts for difference (CfDs). What investors need to know about the December 31, 2026, deadline, returns, and their strategy — as of July 2026.
The short answer
Germany is transitioning its support system under the Renewable Energy Sources Act to bilateral Contracts for Difference (CfDs). Under EU law, new support contracts for wind, solar, and geothermal energy must be structured as CfDs starting July 17, 2027 (Art. 19d of the Internal Electricity Market Regulation). This applies to new EEG-eligible installations with a capacity of 100 kW or more. The CfD model guarantees a minimum revenue but captures excess revenue during periods of high market prices. The Federal Cabinet approved the government’s draft of the EEG 2027 on July 29, 2026; deliberations in the Bundestag will begin in September 2026, and the amendment has not yet entered into force. Plants commissioned by December 31, 2026, will remain under the previous unilateral support scheme.
The CfD requirement for photovoltaics starting in 2027 represents the most significant change to the renewable energy support framework since the introduction of the sliding market premium. For new PV systems of 100 kW or more, a two-way contract for difference will replace the previous one-way subsidy—with a guaranteed minimum revenue but a capped premium for high prices. System operators and investors should know which systems are affected, what the December 31, 2026, deadline means, and how returns will change. The guide to the direct marketing of PV electricity provides an in-depth look at how the ongoing sale of solar power at market prices already works today.
What is the 2027 CfD requirement?
This requirement stems from the EU electricity market reform: Article 19d of the revised Internal Electricity Market Regulation (Regulation (EU) 2019/943, as amended by Regulation (EU) 2024/1747, in effect since July 16, 2024) stipulates that, starting July 17, 2027, new price support contracts for wind, solar, and geothermal energy—must be structured as bilateral spread contracts as of July 17, 2027. The principle itself is therefore non-negotiable—only the national implementation of the detailed parameters in the Renewable Energy Act of 2027 is subject to negotiation.
Bilateral difference contracts instead of a unilateral market premium
The difference from the current system lies in its symmetry. The previous sliding market premium was one-sided: it only kicked in when market prices were low, while plant operators retained all revenues above the applicable value. The two-sided CfD caps precisely these excess revenues. The goal of the reform is to integrate renewables into the market—ensuring predictable refinancing while simultaneously limiting windfall profits in years of high prices. The reference is the annual market value for solar power, specific to each energy source, which transmission system operators publish on netztransparenz.de.
Top-up only if the market value is low. The plant operator retains all proceeds in excess of the applicable value. Potential for upward growth; no refinancing contribution.
Top-up payments at low market value continue as before. If the annual market value exceeds the applicable value, a refinancing contribution is refunded. Minimum proceeds are guaranteed, and the maximum price is capped.
| Feature | Market Premium Today | CfD starting in 2027 |
|---|---|---|
| Low price | Top-up to the required value | Top-up to the required value |
| High price | Plant operators retain excess revenue | Refund of the refinancing contribution |
| Risk Profile | Opportunity to move up | Minimum revenue secured, cap set |
| Reference value | Annual Market Value of Solar | Annual Market Value of Solar |
| Source: Art. 19d of Regulation (EU) 2024/1747; Raue LLP (March 13, 2026); BBH Blog (April 7, 2026). | ||
Who will be affected starting in 2027—and who won't?
As of this date, new support contracts must be structured as bilateral CfDs (Art. 19d of the EU Electricity Market Regulation).
Threshold for the refinancing contribution under the government's draft bill; biomass is excluded.
Deadline: Commissioning by that date means continued unilateral EEG subsidies for 20 years.
The key distinction is between self-consumption and grid feed-in. Solar power used for personal consumption is not compensated under the EEG and is therefore not subject to the refinancing contribution. This applies to subsidized grid feed-in starting at 100 kW—whether it involves full feed-in or surplus feed-in from partial feed-in. For rooftop PV systems and ground-mounted installations under 100 kW, the current model will remain in place for the time being. Those who market their electricity entirely without EEG subsidies via a power purchase agreement (PPA) are not directly affected—however, the draft includes an anti-circumvention clause that prevents a flexible annual switch.
Existing EEG facilities are protected under the principle of protection of legitimate expectations. The EU regulation explicitly applies only to new price support contracts effective July 17, 2027; there are no provisions for retroactive application to existing feed-in tariff commitments. As it stands, the government’s draft of the EEG 2027 also applies only to new installations and leaves the grandfathering provisions for the full 20-year term unaffected.
EEG 2027: What Is the Status of the Law in July 2026?
The time pressure is real, as the EU state aid approval for the current EEG expires on December 31, 2026. Federal Minister of Economic Affairs Katherina Reiche had promised at the BDEW Congress on June 10, 2026, to bring the EEG and the Grid Package before the Cabinet before the summer recess. The deadline was pushed back by a few weeks: The Cabinet ultimately approved the government’s draft on July 29, 2026, along with the Grid Package. Parliamentary deliberations will begin in September 2026.
One of the key points of contention between the CDU/CSU and the SPD is the Federal Ministry of Economics’ plan to eliminate the feed-in tariff for small-scale installations under 25 kW. This change is politically controversial and has not yet been finalized; the current tariff rates are explained in the 2026 EEG Tariff Guide.
As a minimal parliamentary initiative, the Bündnis 90/Die Grünen parliamentary group introduced its own draft of the Renewable Energy Sources Act (EEG) on July 7, 2026 (Bundestag Document 21/6914), which implements only the provisions mandated by the EU: the CfD refinancing contribution for capacities of 100 kW and above, plus resilience tenders. The risk of a funding gap is legally substantiated: A legal opinion by the law firm Raue for the BEE (June 22, 2026) warns that without a new authorization in a timely manner, there is a risk of a ban on EEG subsidies under EU law taking effect as of January 1, 2027.
A key change in the government’s draft: The buffer range between the applicable value and the levy—which had been discussed initially—has been eliminated. The refinancing contribution thus applies immediately above the reference price, with no tolerance range—industry associations criticize this because it increases risk premiums in auctions.
| Stage | Date | Status |
|---|---|---|
| EU Regulation 2024/1747 enters into force | 16.07.2024 | Done |
| BMWE Working Draft (leaked) | 26.02.2026 | public |
| Draft Bill from the Federal Ministry for Economic Affairs and Energy | 21.04.2026 | completed |
| BEE/Raue Report on the Funding Gap | 22.06.2026 | published |
| Green Party Bill in the Bundestag | 07.07.2026 | submitted |
| Cabinet Decision: Government Bill + Network Package | 29.07.2026 | resolved |
| Bundestag Debate | Starting in September 2026 | pending |
| EEG subsidy approval is set to expire | 31.12.2026 | strict EU deadline |
| EU Requirement for Bilateral CfDs | 17.07.2027 | strict EU deadline |
| Source: pv magazine (June 10/July 8, 2026); Prometheus (July 9, 2026); klimareporter (July 13, 2026); ZFK Energy Laws Ticker (July 15, 2026); BEE/Raue Report (June 22, 2026). | ||
CfD Mechanism: How Revenues and Returns Change
For facilities subject to a tender process, the applicable value is determined in the Federal Network Agency’s auction. For the March 1, 2026, open-field solar auction, the maximum price was 5.79 ct/kWh, and the volume-weighted average premium was 4.94 ct/kWh. For the July 1, 2026, auction, the Federal Network Agency (BNetzA) has raised the maximum price to 5.90 ct/kWh. For rooftop PV systems of 25 kW or more, the government’s draft bill provides for a uniform rate and eliminates the full feed-in bonus. The specific amount remains to be determined during the parliamentary process; figures currently circulating vary widely and are deliberately not specified here.
(Average for 2025)
BNetzA March 1, 2026
BNetzA March 1, 2026
In terms of returns, this represents a shift in nature, not in level. The guaranteed minimum revenue reduces revenue risk, lowers financing costs, and allows for higher debt-to-equity ratios—in model calculations, financing costs fall by roughly 50 to 100 basis points. The DIW Berlin estimates that CfDs have the potential to reduce societal electricity generation costs by up to 30 percent (Weekly Report 35/2022); for individual operators, the same model translates to more stable but capped margins. Direct investments through the Helm Group continue to yield returns of 6–10 percent per year before taxes (portfolio data for 2024); with tax leverage, returns of up to 10–12 percent are possible.
| Scenario | One-sided support today | CfD starting in 2027 |
|---|---|---|
| Low price (market price 3.0 ct) | 5.0 ct bonus | 5.0 ct, identical |
| Regular price (market price 5.0 ct) | 5.0 ct | 5.0 ct, identical |
| High price (market price 7.0 ct) | Keep 7.0 ct | 5.0 ct, 2.0 ct contribution |
| Illustrative model calculation; not investment advice. Reference value: 5.0 ct/kWh, based on the average surcharge for open-space installations as of March 1, 2026 (4.94 ct/kWh, BNetzA). | ||
The analysis of direct marketing of PV electricity shows how market values evolve over time and why the stock market price doesn't tell the whole story.
Effective Date: December 31, 2026, and Grandfathering
The legal basis is sound: The protection of property rights under Article 14 of the German Basic Law (GG) safeguards confidence in existing compensation commitments, and the EU regulation explicitly applies only to new price support contracts. Applying CfDs retroactively to existing facilities would be constitutionally untenable.
The gray area in between remains unresolved: For projects awarded contracts in 2025/2026 but not scheduled for completion until 2027 or 2028, the draft’s transitional provisions have not yet been finalized. This is the key risk factor for large-scale projects with long implementation timelines. Anyone who still wants to meet the deadline needs a secured grid connection, the necessary permits, and a signed construction contract—since delivery times for medium-voltage substations can sometimes exceed one year, a late start to construction in 2026 is unrealistic.
Three Strategies for PV Investors Starting in 2027
Strategy 1 — Deadline Sprint. Only advisable if grid connection is secured, approval has been granted, and a construction contract has been signed. Advantage: 20 years of unilateral subsidies without a refinancing contribution, plus the full high-price premium. For most greenfield projects, however, the 2026 deadline is no longer achievable due to long lead times.
Strategy 2 — CfD-Ready. The standard approach for large-scale projects planned today. Site selection and storage integration become key factors, because a high profile factor raises market revenues above the required rate of return. The guide to PV systems with battery storage provides further details on the economic viability of storage combinations.
Strategy 3 — The PPA Approach. Suitable for projects with industrial buyers that have strong creditworthiness. Solar PPA prices in Europe stood at 55.05 €/MWh in the first quarter of 2026 — the fifth consecutive quarterly decline (LevelTen European PPA Index). Important: According to the draft, withdrawal from the subsidy program is possible only once and is irrevocable. Those who wish to operate entirely without equity capital can find the details in the article on solar power without equity capital.
| Criterion | Deadline Sprint | CfD-Ready | PPA Path |
|---|---|---|---|
| Commissioning | through December 31, 2026 | starting in 2027 | Starting in 2027 (opt-out) |
| Funding scheme | One-sided EEG funding | Contract for Difference | No EEG subsidies |
| High-Price Opportunity | full | capped | PPA-fix |
| Bankability | high | very high | Average (customer creditworthiness) |
| Is 2026 a realistic goal? | only if construction begins in 2025 | Default path | for industrial customers |
| Logic Energy's own analysis based on the government draft dated July 29, 2026, and BNetzA auction data. All figures are for illustrative purposes only and do not constitute investment advice. | |||
Check if the project is ready to proceed
Honestly assess the permit, area, and grid connection status.
Check the deadline
Is it realistically feasible to have the system up and running by December 31, 2026?
Ensure a stable power connection
Reserve the substation and connection approval early.
Select Funding Type
CfD or PPA — Be sure to observe the deadline and opt-out rules.
Optimize Location
Profile factor and inventory boost market revenues.
Effective July 17, 2027
New subsidy agreements are structured as bilateral CfDs.
Risks, Criticism, and Personal Use
Since the first draft, the German Solar Industry Association has been warning of a market slump should the PV feed-in tariff for small-scale systems be eliminated. The German Association for New Energy Economics is calling for a coherent PPA framework instead of a rigid opt-out. The shift in bankability is structurally significant: Higher debt-to-equity ratios under the CfD stabilize financing but shift the investor landscape toward institutional investors with a low tolerance for volatility.
For companies with their own photovoltaic systems, the following applies: Those that consume a significant portion of their solar power themselves have the clearly superior economic case—avoided electricity purchase costs of roughly 20–30 ct/kWh, depending on the volume purchased, are offset by a significantly lower feed-in tariff (BDEW Electricity Price Analysis 04/2026). The CfD logic applies only to surplus feed-in starting at 100 kW, and even then only in years with high electricity prices. Higher rates of self-consumption can be achieved with a battery storage system; the specific economic viability is addressed in the guide to PV systems with battery storage. Nothing changes for lease and electricity supply models without equity investment, as these operate outside the scope of EEG subsidies.
The industry is also responding with a European-wide diversification: Italy is becoming more attractive under its own CfD auction regime, as the market analysis on PV investment in Italy shows. Contracts for Difference are thus evolving from a German exception into the European standard for the energy transition.
Take action instead of waiting
Whether it’s a deadline sprint, a CfD-ready site, or a PPA option—we’ll break down what the coming months mean for your specific project. Thanks to the personal liability of mediplan Helm e.K.’s owners, this is a well-founded assessment, not just an anonymous consultation.
Frequently Asked Questions (FAQ)
What is the CfD requirement for photovoltaic systems starting in 2027?
A two-way contract for difference (CfD) offsets the difference between a fixed target value and the annual market value in both directions. In years when prices are low, the plant operator receives a premium; in years when prices are high, the operator pays back a refinancing contribution. Under EU law, new support contracts must be structured as CfDs starting July 17, 2027.
What is the minimum plant size for the CfD to apply starting in 2027?
According to the government draft bill from the Federal Ministry for Economic Affairs, the refinancing contribution applies to new EEG-subsidized facilities with an installed capacity of 100 kW or more. Biomass is excluded. The EU regulation allows exemptions only for small-scale and demonstration facilities; the final threshold may still change during the legislative process.
Does the CfD also apply to existing PV systems?
No. Existing facilities are protected by the principle of legitimate expectations for their entire 20-year feed-in tariff period. The EU regulation applies only to new feed-in tariff contracts effective July 17, 2027, or later. Plants commissioned on or before December 31, 2026, are expected to remain eligible for unilateral support; however, transitional rules for projects awarded in 2025/2026 are still pending.
When will the EEG 2027 take effect?
The target date is January 1, 2027. The Cabinet approved the government’s draft bill on July 29, 2026; deliberations in the Bundestag will begin in September 2026. A postponement until spring 2027 remains possible. The EU requirement for bilateral CfDs will take effect on July 17, 2027.
Is a solar investment still worth it despite the CfD requirement?
Yes. The CfD alters the risk-return profile but does not eliminate it: It guarantees a minimum return and reduces financing costs. Direct investments through the Helm Group generate a 6–10 percent annual return before taxes. These figures are based on portfolio data and do not guarantee future results. The contracting party is mediplan Helm e.K., with personal liability of the owners pursuant to Sections 1, 17, and 19 of the German Commercial Code (HGB).
What does the CfD requirement mean for businesses that consume their own electricity?
Not much. Solar power consumed on-site is not subject to the refinancing fee. Only surplus feed-in exceeding 100 kW is affected—and even then, only in years when electricity prices are high. Nothing changes for lease and electricity supply models without equity, in which an investor builds the system and the business purchases electricity.
Conclusion: More predictable, but capped
The 2027 CfD requirement makes the revenue from new large-scale PV plants more predictable, but caps the potential for high prices. The requirement itself is enshrined in EU law and takes effect on July 17, 2027; however, as of July 2026, the national implementation in the EEG 2027 remains politically stalled, and a funding gap starting in 2027 is a real possibility. Investors need to keep a clear head now: assess the opportunity presented by the deadline, or else ensure they are CfD-ready or plan for the PPA route.
For those who want to learn more about the basics: An Overview of Photovoltaic Investments. The 2026 EEG Feed-in Tariff Guide explains the feed-in tariff rates, and the Logic Energy Investor Model demonstrates how direct investment works in practice.
References
- Regulation (EU) 2024/1747 — Internal Electricity Market Regulation, Art. 19d (EUR-Lex) · in force since July 16, 2024
- Raue LLP — Transition of the Funding System to Bilateral Differential Agreements · March 13, 2026
- Becker Büttner Held — EEG 2027: Feed-in Tariff, CfD (Part 1) · April 7, 2026
- Prometheus Law Firm — EEG 2027 · July 9, 2026
- pv magazine — Reiche at the 2026 BDEW Congress · June 10, 2026
- pv magazine — Brief Analysis: EEG Subsidy Gap Looms · July 8, 2026
- klimareporter — A Risky Game of Delays Surrounding the EEG and the Grid Package · July 13, 2026
- ZFK — Energy Laws Ticker (EEG, Grid Package, Cabinet Schedule) · As of July 15, 2026
- BEE / Raue — Legal Opinion on the Consequences of the Expiration of the State Aid Approval (PDF) · June 22, 2026
- German Bundestag — Bill introduced by the Alliance 90/The Greens parliamentary group, BT-Drs. 21/6914 (PDF) · July 7, 2026
- Federal Network Agency — Closed Tenders for Solar Power Plants (Ground-Mounted) · Bidding Deadlines: March 1 and July 1, 2026
- Grid Transparency — Market Value Overview (Annual Solar Market Value) · Ongoing
- DIW Berlin — Differential Contracts Promote Expansion (Weekly Report 35/2022) · August 11, 2022
- LevelTen Energy — European PPA Price Index, Q1 2026
- BDEW — Electricity Price Analysis, April 2026 · April 15, 2026
Related Articles: Solar Peak Act & Negative Electricity Prices · AgNes Reform for PV Investors
