Photovoltaics vs. Lignite 2025: How Solar Power Surpassed Lignite and Natural Gas for the First Time
In 2025, solar power in Germany generated more electricity than lignite for the first time: approximately 87 TWh from solar versus 67.2 TWh from lignite, ranking second in the electricity mix behind wind power. What this shift in the trend means for PV investors and companies.
The short answer
In 2025, solar power surpassed lignite for the first time: In terms of net public electricity generation, solar provided approximately 71 TWh compared to 67.2 TWh from lignite; including self-consumption, the total was approximately 87 TWh—a 21 percent increase over 2024. Solar power is thus the country’s second-largest source of electricity behind wind power (Fraunhofer ISE, Energy-Charts, as of January 2026).
This article is intended for investors interested in investing in photovoltaic systems, as well as for companies seeking to understand the market. Businesses looking to install their own system at their location will find the right starting point on our page about installing a PV system for their business. The trend shift in 2025 is not simply the result of a sunny summer, but rather the outcome of structural shifts in the German electricity market. The topic of “Photovoltaics vs. Lignite in 2025” is therefore more than just a statistic: The shift in the electricity mix has a direct impact on investment decisions and the economic viability of PV projects.
The data for this article is based on the annual analysis of the Energy Charts from the Fraunhofer Institute for Solar Energy Systems (ISE), as well as publications from the Federal Network Agency, Destatis, BDEW/ZSW, Ember, and the German Solar Industry Association (BSW-Solar). Each key figure is accompanied by its source and date; where sources use different reference metrics—net electricity generation, grid feed-in, or gross electricity consumption—the respective metric is specified to ensure that the values from each analysis remain comparable.
Solar Power to Surpass Lignite by 2025: The Key Figures
Gross PV Generation in 2025 (+21% compared to 2024)
Lignite in 2025 – Lowest Level Since 1961
Share of Solar Power in Net Electricity Generation
Installed PV capacity as of the end of 2025
According to BSW-Solar’s projections, solar energy accounted for approximately 17 to 19 percent of the electricity mix in 2025, placing it ahead of natural gas (approximately 16 percent) and lignite (approximately 14 percent). Photovoltaics has thus evolved from a niche technology into a cornerstone of Germany’s electricity supply.
| Key figure | Value 2025 | Source / Date |
|---|---|---|
| Total (gross) PV generation | approximately 87 TWh (of which ~16.9 TWh is self-consumption) | Fraunhofer ISE, Energy Charts, January 2026 |
| PV Grid Connection | 70.1 TWh (+17.4%) | Destatis, March 6, 2026 |
| Growth compared to 2024 | +21% / approximately +15 TWh | Fraunhofer ISE |
| Share of Solar Power in Net Electricity Generation | about 18% | BSW-Solar, January 2026 |
| Share of PV in Grid Feed-in | 16,0 % | Destatis, March 2026 |
| Installed PV capacity by the end of 2025 | 116.8 GWp (DC) | Fraunhofer ISE |
Important for context: The gross generation of approximately 87 TWh includes self-consumption of about 16.9 TWh, which never flows into the public grid. The direct comparison with lignite therefore takes place at the level of net public electricity generation—and that is precisely where solar, at around 71 TWh, has surpassed lignite for the first time. Solar power generation is supported by a broad base: According to Destatis, approximately 4.8 million photovoltaic systems were in operation at the end of 2025; the Market Master Data Register lists approximately 5.7 million, including all micro-systems. We analyze the amount of capacity added and how the system structure is shifting separately in our article on photovoltaic expansion in Germany.
Germany's Electricity Mix in 2025: The New Ranking
Renewable energy sources are those that are naturally replenished and—unlike fossil fuels such as lignite and natural gas—are not finite resources. These primarily include photovoltaics, wind energy, hydropower, and biomass.
| Energy sources | Generation (TWh) | Percentage | Change from 2024 |
|---|---|---|---|
| Wind Power (Onshore) | about 132 | about 31% | −3,2 % |
| Photovoltaics | about 70–71 | about 17–18% | +21 % |
| Lignite | 67,2 | about 16% | declining |
| Natural gas | about 50–52 | about 12% | increasing |
| Biomass | about 36 | about 9% | slightly down |
| Bituminous coal | about 26.7 | about 6% | slightly rising |
| Hydropower | about 17 | about 4% | declining |
| Total renewables | about 235 | 55,9 % | stable |
| Source: Net public electricity generation, Fraunhofer ISE / Energy-Charts, as of January 2026. For the first time, solar power has surpassed lignite and natural gas. | |||
Share of Renewable Energy in the Electricity Mix in 2025
Depending on the metric used, the share of renewable energy in 2025 ranged from about 55.8 to 58.6 percent—a record high in each case. According to the BDEW and ZSW, renewables accounted for about 55.8 percent of gross electricity consumption; according to Fraunhofer ISE, they accounted for 55.9 percent of net public electricity generation; and according to Destatis, they accounted for 58.6 percent of net electricity fed into the grid. Photovoltaics and wind energy are the main drivers of this share.
These three percentages are not contradictory; they refer to different metrics: total electricity consumption including on-site industrial generation, public generation, or only electricity fed into the general grid. The key point is that all three metrics for the share of renewable energy will reach historic highs by 2025—and that the growth will come primarily from solar power, while wind energy has recently declined slightly. Particularly striking is the decline in lignite, which the next section examines in more detail.
Lignite at 1961 Levels: Why the Decline Is Structural
The underlying general trend is a long-term structural shift: The use of fossil fuels in the German electricity sector is gradually being replaced by renewable energy sources. This development has been proceeding steadily for years and is largely independent of individual years’ weather conditions or economic cycles. It is only at this level of the overall trend that the specific market mechanism driving lignite further into decline year after year can be understood.
The Merit Order Effect in Detail
The mechanism behind this is called the merit-order effect. In the electricity market, the power plants with the lowest variable costs win the contract. Solar power plants offer their electricity at production costs close to zero and are therefore given priority in feeding power into the grid. Lignite and gas-fired power plants, with their high fuel costs, operate less frequently as a result and face sustained pressure. This effect is exacerbated by a decline in electricity demand in energy-intensive industries.
| Year | Lignite | Photovoltaics | Distance |
|---|---|---|---|
| 2020 | about 90 TWh | about 50 TWh | 40 TWh in favor of lignite |
| 2024 | about 71 TWh | about 72 TWh (gross) | Photovoltaics Are Gaining Ground |
| 2025 | 67.2 TWh | about 87 TWh (gross) | Photovoltaics in the Lead |
| Source: Fraunhofer ISE / Energy-Charts, annual reports. Lignite in net electricity generation; PV for 2024/2025 as gross generation; for a direct net comparison, see the key figures above. | |||
For investors, the message is clear: The decline in fossil fuel-based power generation is not a temporary phenomenon, but a long-term trend. Anyone investing in photovoltaics today is betting on the technology that has been displacing fossil fuels for years—and whose cost advantage grows with every new system installed. This trend does not stop at the German border: Across Europe, the same picture emerged in 2025, as the next section shows.
EU Outlook: Wind and Solar Outpace All Fossil Fuels for the First Time
At the European Union level, wind and solar power reached a historic milestone in 2025: Together, wind turbines and solar panels generated more electricity than all fossil fuels combined. Key figures from Ember’s *European Electricity Review 2026*:
- EU solar power generation in 2025: 369 TWh, an increase of 20 percent, or 62 TWh, compared to 2024
- EU Coal-Fired Electricity Generation in 2025: 257 TWh – an all-time low, down 4.5 percent
- Wind and solar combined: 30.1 percent (841 TWh), exceeding the total share of all fossil fuels—29.0 percent (809 TWh)—for the first time
- Coal Concentration: Germany and Poland together generate over 74 percent of the EU’s total coal-fired electricity
- In 19 of the 27 EU countries, the share of coal is zero or less than 5 percent
This gives German PV investors a locational advantage. Despite the decline in lignite use, Germany has a well-established infrastructure for the planning, construction, and operation of large-scale plants—an infrastructure that many other markets are only now beginning to build. At the same time, a comparison across Europe shows that Germany and Poland still have above-average exposure to coal—so there is still significant room for solar to displace coal in these countries. However, the European solar boom has a downside that is also shaping the German market: The more solar power is fed into the grid, the more frequently exchange prices dip into negative territory—the topic of the next section.
Negative Electricity Prices in 2025: 573 Hours and Their Consequences
- Hours with negative prices: 573 hours (Federal Network Agency / EPEX Spot, as of March 2026)
- Negative days: 110 days, or nearly every third day of the year
- Lowest price: minus 250.32 euros/MWh on May 11, 2025
- Share of solar generation during hours with negative prices: approximately 23 percent, compared with 14.5 percent the previous year
- Annual average market price for solar power: 4.508 ct/kWh (Grid Transparency / Transmission System Operator)
The Solar Peak Act, in effect since February 25, 2025, addresses this development: When prices are negative, the feed-in tariff for new systems of 2 kWp or more is suspended starting from the first negative quarter-hour. Additionally, new systems without a smart metering system may feed no more than 60 percent of their rated capacity into the grid. To compensate, the legislature extends the subsidy period by the number of hours lost—meaning the total subsidy amount remains the same, but its timing is shifted. We maintain the specific feed-in tariff rates centrally in the Guide to EEG Tariffs 2026, and our Guide to Negative Electricity Prices for PV Investors provides an in-depth look at how negative prices work.
The outlook puts the record figure into perspective: In the first half of 2026, the number of hours with negative prices fell to around 291—about 25 percent fewer than in the same period the previous year (Federal Network Agency / naturstrom, as of July 2026). However, the fluctuations were more pronounced. Our article on the direct marketing of PV electricity explains how direct marketing and market value specifically affect the revenue structure.
Storage Market 2025: Flexibility Becomes a Driver of Returns
By the end of 2025, battery storage systems with a cumulative capacity of approximately 25.5 GWh had been installed in Germany, spread across more than 2.2 million systems. According to BSW-Solar, capacity has increased fivefold within four years. The most dynamic segment is large-scale storage systems exceeding 1 MW: Their capacity grew by 62 percent in 2025, and the market for newly installed large-scale megawatt-class battery storage systems has more than doubled. The German Solar Industry Association (BSW-Solar), led by CEO Carsten Körnig, points to a rapidly expanding storage market—parallel to solar energy’s surge in popularity over lignite and natural gas.
| Key figure | Value 2025 | Source |
|---|---|---|
| Cumulative battery capacity | about 25.5 GWh | Market Master Data Registry / BSW-Solar |
| Installed Systems | over 2.2 million | Market Master Data Register |
| Share of Home Storage in Total Capacity | about 80 percent | Market Master Data Register |
| Total new construction in 2025 | about 7.3 GWh (BSW: about 6.5 GWh) | pv magazine / BSW-Solar |
| Capacity Expansion of Large-Scale Storage Systems Over 1 MW | +62 % | Market Master Data Register |
| Projected Storage Demand for 2030 | 100 to 170 GWh | Fraunhofer ISE |
| Sources: BSW-Solar (January 2026), pv magazine / RWTH Aachen ISEA (January 2026), Market Master Data Registry. All information is provided without warranty; as of March 2026. | ||
Market Trends in Large-Scale Energy Storage
The energy storage market is thus the only segment that will grow in 2025 in terms of both the number of systems and the average system size. This is crucial for project decisions: A storage system charges almost for free during hours when electricity prices are negative and discharges during expensive peak hours. It is precisely this time lag that turns a yield risk into a source of revenue.
Co-location as a Business Model
The strategic advantage lies in co-location—that is, the combination of solar power and battery storage at the same grid connection point. According to a white paper by 8Energies, enspired, and Goldbeck Solar (February 2026), a co-located storage system can improve the internal rate of return of a new solar project by about 29 percent; for existing systems, the improvement is up to 24 percent. Our article on photovoltaics with battery storage explains how co-location works in a commercial context.
Three Drivers Behind the Record Year of 2025
Driver 1: Predictability thanks to the 20-year EEG feed-in tariff
The Renewable Energy Act guarantees photovoltaic systems a fixed feed-in tariff for 20 years; for larger ground-mounted systems, this is achieved through tenders with guaranteed prices. This level of predictability over two decades is available to only a few types of power plants. Even the Solar Peak Act, which excludes hours with negative prices from the feed-in tariff, maintains the total volume of subsidies by extending the subsidy period. The expansion target of 215 GW of installed photovoltaic capacity by 2030 is politically enshrined and is being pursued by the Federal Ministry for Economic Affairs under Minister Katherina Reiche as part of the energy transition.
Driver 2: Profitability at an All-Time High
System costs for photovoltaics will reach a low point in 2026. Large ground-mounted systems of 1 MWp or more will cost around 700 to 900 euros/kWp, while commercial rooftop systems will cost 900 to 1,600 euros/kWp (Fraunhofer ISE). The levelized cost of electricity for ground-mounted PV ranges between 4 and 7 ct/kWh, depending on the location. The main economic driver for commercial systems is self-consumption: Every kilowatt-hour consumed on-site replaces expensive grid electricity and makes the system less dependent on feed-in tariffs and market prices.
Driver 3: The grid needs flexible generators
Germany needs photovoltaics not for ideological reasons, but because of systemic necessity—and because of the climate protection goals that dictate a gradual phase-out of coal in the electricity sector. As the share of volatile generation grows, so does the need for flexibility in the power grid. The upcoming grid fee reform by the Federal Network Agency will introduce dynamic tariffs that reward flexible generators and storage systems. Battery storage systems that charge when prices are low and feed power into the grid during peak hours will thus become an integral part of grid stabilization and a standalone source of revenue.
What the Reversal of the Trend Means for PV Investors
The year 2025 reveals a mature but evolving market. The economic implications are significant: In 2025, the solar and energy storage industry generated approximately 30 billion euros in revenue and employed about 120,000 people (BSW-Solar), with a total installed PV capacity of over 116 GW. For investors, this shifts the logic of returns: away from simply feeding electricity into the grid and toward the smart marketing of generated kilowatt-hours.
Current market trends underscore this momentum. In the first half of 2026, PV feed-in to the grid rose to 43.2 TWh, an increase of 10 percent compared with the same period the previous year and an all-time high for a half-year; solar power accounted for 18.2 percent of net electricity generation (Fraunhofer ISE, July 2026). Installed capacity grew to 118.2 GWp by the end of May 2026 (BSW-Solar). The upward trend that began in 2025 is thus continuing.
Our investment guide on photovoltaics as an investment explains how this market situation translates into specific return expectations, investment structures, and terms. There you will find documented return metrics, the role of mediplan Helm e.K. as a contractual partner, and the complete risk disclosures. The key success factors remain consistent across all segments: land availability and grid connection determine timing and costs; site quality accounts for a significant portion of the variation in returns; and the quality of operational management determines the long-term return on investment.
From Market Trends to Specific Investments
Logic Energy designs and builds solar power systems for investors and businesses—from site screening and financing structures to long-term operations management. If you’d like to know how the 2025 market trend can translate into a concrete investment opportunity for you, please contact us.
Frequently Asked Questions (FAQ)
Will solar power really have overtaken lignite by 2025?
Yes. In terms of net public electricity generation, solar power generated approximately 71 TWh in 2025, compared to 67.2 TWh from lignite. Including self-consumption, solar power generated about 87 TWh, an increase of 21 percent compared to 2024. Solar is thus Germany’s second-largest source of electricity behind wind power (Fraunhofer ISE, January 2026).
What was the share of solar power in the electricity mix in 2025?
In 2025, photovoltaics accounted for about 18 percent of net electricity generation (BSW-Solar) and 16.0 percent of electricity fed into the grid (Destatis). Renewable energies as a whole covered about 55.8 percent of gross electricity consumption (BDEW/ZSW)—a historic high.
Why is electricity generation from lignite declining so sharply?
Solar power, with marginal costs close to zero, is fed into the grid first due to the merit-order effect and is driving expensive lignite-fired power plants out of the market. In 2025, lignite-fired generation fell to 67.2 TWh, the lowest level since 1961. The decline is structural, not cyclical, and has been ongoing for years.
What do negative electricity prices mean for PV investors?
In 2025, there were 573 hours with negative prices. During these hours, unsecured systems receive no compensation. Systems with battery storage can reverse this logic: they charge at low prices and feed power back into the grid during peak-price periods. Flexibility thus transforms from a risk into a source of revenue. The guide to negative electricity prices provides further details.
How is the storage market developing in Germany?
By the end of 2025, approximately 25.5 GWh of battery capacity had been installed, spread across more than 2.2 million systems—a fivefold increase in four years. Large-scale storage systems over 1 MW grew by 62 percent. Fraunhofer ISE projects a demand of 100 to 170 GWh by 2030. The storage market is growing faster than the power generation market.
Is a solar investment still worth it after the record year of 2025?
The market is ripe, but the logic behind returns is shifting from simply feeding electricity into the grid to smart marketing. Historically low system costs, predictable regulatory conditions, and the leverage provided by storage make this a sound investment. Individual suitability must be assessed on a case-by-case basis; our investment guide contains verified key figures.
Does this trend hold true across Europe as well?
Yes. According to Ember’s *European Electricity Review 2026*, wind and solar generated more electricity in the EU in 2025 than all fossil fuels combined for the first time (30.1 percent versus 29.0 percent). EU solar generation increased by 20 percent to 369 TWh, while coal-fired power generation fell to a record low of 257 TWh.
Conclusion
2025 marks a structural turning point in the German electricity market: Photovoltaics have surpassed lignite in electricity generation and have risen to become the second-largest source behind wind power. The decline in fossil fuel-based generation is structural; a European comparison confirms this trend; and the storage market is opening up a new level of returns through co-location. For investors and companies, the situation is thus clearer than in previous years: The regulatory framework is predictable, system costs are at historic lows, and market data from the first half of 2026 confirm the upward trend. Logic Energy designs and builds solar power plants for investors and companies—from site acquisition to long-term plant operation.
References
- Fraunhofer ISE, Energy Charts – Electricity Generation in Germany in 2025 (Prof. Dr. Bruno Burger)
- Fraunhofer ISE – Public Electricity Generation in 2025: Wind and Solar Lead the Way for the First Time (January 2026)
- pv magazine – Photovoltaics to Surpass Lignite in Net Electricity Generation for the First Time in 2025 (January 2, 2026)
- Destatis – Electricity Generation in 2025: Feed-in from Photovoltaics Up 17.4 Percent (March 6, 2026)
- BSW-Solar – Solar Power Overtakes Lignite and Natural Gas; Battery Storage Market Gains Momentum (June 23, 2026)
- BSW-Solar – Battery Storage Capacity Increases Fivefold Within Four Years (January 12, 2026)
- Ember – European Electricity Review 2026 (January 22, 2026)
- Destatis – Approximately 4.8 million photovoltaic systems installed by the end of 2025 (March 2026)
- pv magazine – Grid feed-in from photovoltaic systems rises by 10 percent in the first half of 2026 (July 1, 2026)
Related Articles: Expansion of Photovoltaic Capacity in Germany · Negative Electricity Prices: A Guide · Photovoltaics as an Investment
