Another summit for energy markets: Key considerations of the "Solar Peak Act”

In one of its final sessions ahead of the upcoming elections the German parliament on 31. January 2025 approved the "Energy Industry Act Amendment to Address Temporary Generation Surpluses" (BT Drucksache 20/14235; commonly known as the "Solar Peak Act”). 

The "Solar Peak Act" represents a significantly condensed version of the original Energy Industry Act amendment, amending sections of the Energy Industry Act (EnWG), the Renewable Energy Sources Act (EEG), and the Metering Act (MsbG).

Flexibility for Energy Storage Systems

In response to the increasing importance of energy storage, the Solar Peak Act includes several changes designed to improve their integration into the electricity market and grid.  

A new "mixed electricity storage system" will allow storage systems that store both green and grey electricity to claim the EEG subsidy for a portion of the electricity later used from storage, based on the subsidy rights of the connected renewable energy plant (so called "deferral option"). Second, the newly introduced "lump-sum option" allows solar power systems combined with storage to claim EEG funding for a fixed portion of the total energy generated and fed into the grid at the same time.

Smart Meter Rollout 

The Solar Peak Act aims to expedite the stalled rollout of smart meters by making mandatory smart meters and control devices for renewable energy installations with capacities exceeding 7 kW obligatory. Furthermore, systems ranging from 2 kW to 100 kW will be required to limit their feed-in capacity to 60% until smart grid capabilities are fully established. The purpose of this provision is preventing grid overloads. Zero feed-in systems and plug-in systems are exempt from the control requirement.

Elimination of Feed-in Tariffs for Negative Electricity Prices

A major provision of the Solar Peak Act is the advanced reduction of the EEG subsidy during periods of negative electricity prices (amendment to Section 51 EEG). This change aims to improve the integration of renewable energy into the market. Initially, the regulation applies only to new installations, but Section 100 para 47 EEG now allows existing installations that currently receive feed-in tariffs to participate in the new system. As a further incentive, the feed-in tariff will increase by a bonus of 0.6 cents per kWh during periods of positive electricity prices.

While it remains to be seen what regulatory changes the new German government will bring to the energy market, this legal reform can be considered as a welcome step towards a more flexible energy market.