Photovoltaic package I – Changes in brief

On May 16, 2024, after almost a year of negotiations, the so-called “Solar Package I”. It previously passed the Bundestag and Bundesrat on April 26, 2024. In addition to amending the Energy Act (EnWG) and the Act on the Operation of Measuring Points (MsbG), Solar Package I also includes broad changes to the Renewable Energy Sources Act (EEG).

The legislative package aims to promote the development of photovoltaic technology in Germany to achieve the target of 215 GW of photovoltaic capacity by 2030. To this end, a large number of legal changes and simplifications have been adopted that affect wind energy and storage in addition to photovoltaic systems. According to BMWK (Federal Ministry of Economic Affairs and Climate Action), Solar Package I implements key elements of BMWK’s photovoltaic strategy.

Our experts, Dr. Christian Ertel and Dr. Julia Wulff, have summarized below the key innovations in rooftop photovoltaic systems, ground-mounted photovoltaic systems including agrivoltaics and battery storage systems.

New regulations regarding photovoltaic systems mounted on buildings

• New rooftop energy contract options (site power purchase agreements or PPAs)
  

For the first time, Solar Package I makes it possible to subsidize on-site PPAs also for commercial properties under the EEG (so-called electricity subsidy for tenants). However, the condition is to assume full supply for the tenant and an appropriate metering concept. Those who find this too burdensome can now use a new type of contract, the so-called joint supply of buildings (Article 42b EnWG). The advantage of the new type of contract is that minimum contract content, billing requirements, electricity labeling and full supply obligations no longer apply (partially). Unlike the original design, the maximum initial contract period of two years for commercial customers has been removed, meaning long-term contracts are now also possible.

• Lowering the tender threshold / new remuneration rates / full guarantees
  

After raising the threshold for the obligation to participate in the EEG tender in 2023 in order to receive a market bonus of up to 1,000 MW, it will now be reduced again as part of the 1st Photovoltaic Package to the current value of over 750 kW. For systems below this threshold, statutory wage rates in the power range from 41 kW to 750 kW will increase by 1.44 cents/kWh. Additionally, Solar Package I provides for simplifications for roof PV systems up to a maximum of 750 kW for the so-called full power; in particular, the avoidance of system aggregation has now been extended to several rooftops of different buildings.

• Increasing the threshold for the direct marketing obligation
  

The current limit of 100 kW for the direct marketing obligation has been increased to 200 kW, at least in the case of free introduction of surplus energy to the grid.

• Repower explanation
  

We have already managed to replace the old modules with more powerful and efficient ones without losing the original salary. However, in the case of repowering, subsidy entitlements only extend to the part of the production corresponding to the original production before replacement. In practice, there were ambiguities because the relevant standard was in the part relating to ground-mounted photovoltaic installations. Solar Package I now clarifies that this also applies to rooftop photovoltaic systems.

• Increased performance limit for system certificates
  

System certificates are no longer required for systems with a supply capacity of up to 270 kW or an installed capacity of up to 500 kW. Simplified verification by means of individual certificates is sufficient.

In addition to the Photovoltaic Package I, a comprehensive draft bill amending the Electricity Tax Act was recently published, which provides further relief for rooftop photovoltaic systems, but which still needs to go through the legislative process.

New regulations for ground-mounted photovoltaic systems

• Increased offer performance limit
  

As part of the First Photovoltaic Package, the upper limit to which ground-based systems are subsidized was raised from 20 MW to 50 MW, after the limit initially dropped from 100 MW to 20 MW at the beginning of the year.

• Minimum criteria for ground-mounted photovoltaic systems
  

With immediate effect, all ground-mounted photovoltaic systems must meet minimum nature conservation criteria to receive the EEG benefit. Operators can choose from a catalog of five minimum criteria and must ensure that at least three of these criteria are met as part of the tender process. Appropriate criteria have also been added for power plants with a capacity below 1 MW. The aim of these requirements is to ensure that subsidized terrestrial systems are more compatible with nature and the landscape.

• Smaller area for disadvantaged areas in the new federal states
  

The financing options for ground-mounted systems in so-called less favored areas are now significantly reduced if they are located in an area of ​​significant nature conservation interest. In addition, the Länder received new powers to further limit the eligible area. For federal states where it was previously not possible to finance terrestrial systems in disadvantaged areas (e.g. Mecklenburg-Vorpommern or Brandenburg), the legislator has now defined a minimum area eligible for financing.

• Obligation to tolerate connection to the network
  

The original project included the obligation for land owners to tolerate connection to the network (laying, construction, maintenance, repair, protection and operation of network connections). The currently adopted version of the First Solar Package relaxes this obligation to tolerate shading only of public land. The same applies to the right to drive and swing on land during the construction and dismantling of wind turbines.

A special tender amount and a separate maximum limit of 9.5 Ct/kWh (2024) will be introduced for agrivoltaics under the normal tender procedure for terrestrial systems. The mandatory requirement for participation in this sub-segment is a minimum height of 2.1 m or 0.8 m (for vertical systems). However, the existing additional bonuses for agrivoltaics will no longer apply.

Battery storage

• Promotion combined with networking
  

The new regulation in the Energy Act means that the network operator can no longer give priority to connecting renewable energy systems over electricity storage systems (gray energy) when connecting to the grid. This is the first step towards harmonization. However, grid-connected energy storage systems still do not benefit from the specific advantages of connection to renewable energy in accordance with Section 8 of the EEG or exemption from the costs of building renewable energy systems.

• Leveling up renewable energy systems
  

Until now, battery storage systems were only considered renewable energy systems if they were technically assured to be 100% powered by electricity from directly connected renewable energy systems. Solar Package I provides for some freedom in this respect. In the future, it should initially be possible to switch between gray and green electricity storage systems every two months during the year without losing the status of a renewable energy system. In the final phase, it should be possible to divide the amount of energy accumulated over time between gray and green. However, the new regulations depend on the decision of the Federal Network Agency.

In addition to rooftop photovoltaic systems, electricity storage systems are also significantly affected by the recently published amendment to the electricity tax attached to Photovoltaic Package I. According to it, the (partial) exemption from electricity tax in the case of electricity storage systems is to be amended to avoid double taxation. In addition, the (previous) state of usability of battery storage systems is to be canceled in some constellations.

Initial assessment

Solar growth has already increased to 14.1 GW in 2023. This is almost double the growth in 2022, but to reach 215 GW by 2030, an annual expansion of approximately 19 GW is required. Photovoltaic package I makes an important contribution to this. Particularly welcome is the increase in bid volume from 20 to 50 MWp, which allows project planners to promote more cost-effective systems, as well as contractual simplifications for on-site PPAs. On the other hand, the new regulations on disadvantaged areas and agrivoltaics are a double-edged sword, bringing relief and making the situation worse compared to the previous status quo. The limited right to lay cables and cross land has also been criticized by project developers as being impractical, but has been welcomed by farmers’ associations. Similarly, changes to electricity storage are certainly a step in the right direction, but they are certainly not yet a big step forward in implementing an electricity storage strategy. Overall, however, we believe that the Photovoltaic Package should be welcomed, even if there are increasing calls to implement the originally announced Photovoltaic Package II. The draft resolution published in parallel by parliamentary coalition groups creates the prospect of adopting the Solar Package II before the end of the current term.