Germany’s Solarpaket 1: New incentives for solar in the DACH region

Germany is ramping up its solar capabilities thanks to the approved Solarpaket 1 — or Solar Package 1 — legislation that aims to drive higher solar adoption, reduce barriers to installation, and bolster Germany’s renewable energy output. It will also increase feed-in tariffs for commercial and industrial solar projects. 

With 384 votes in favor, 79 against, and 200 abstentions, Germany’s parliament approved the Solarpaket 1 in a vote that marked a turning point for Germany. The new regulation will open doors to expand investments in solar, with incentives that make the sector more appealing than ever. 

Here’s a detailed look at what Solarpaket 1 includes and how it’s set to reshape solar’s role across Germany and the wider DACH region.

What is Solarpaket 1?

Germany’s Solarpaket 1, approved by both the Bundestag and Bundesrat on April 26, 2024, is designed to supercharge solar energy growth nationwide. This legislative package is part of Germany’s broader Renewable Energy Sources Act and responds directly to the ambitious 2030 targets set by the government. 

The ultimate aim? To generate 80% of the country’s electricity from renewable sources, with solar capacity increasing from 82 GW to 215 GW.

Federal Minister Robert Habeck describes Solarpaket 1 as a “booster” for solar energy. Following the record-breaking 14 GW of new solar installations in 2023 and then the subsequent 16.2 GW in 2024, this package removes bureaucratic barriers, simplifies regulations, and opens up more opportunities for solar installations across different sectors. It supports a variety of projects, from small balcony PV installations and commercial rooftops to large-scale ground-mounted systems.

The package also reflects Germany’s forward-thinking climate strategy, maintaining stringent CO2 targets while allowing for flexible, efficient expansion. Beyond solar, it includes measures for other renewables, storage solutions, and grid expansion, aiming for a streamlined, integrated approach that will help Germany meet its climate goals.

What regulations will Solarpaket 1 bring?

Germany’s new Solarpaket 1 introduces new regulations across four key areas: ground-mounted solar installations, rooftop PV systems, energy storage, and grid connections. Each of these changes is designed to make solar projects more accessible and commercially viable.

Ground-mounted solar plants

Solarpaket 1 introduces enhanced financial support specifically for “special solar plants,” including agri-PV, floating PV, moorland PV, and parking PV systems. These plants now have their own category in the EEG tender system, with updated maximum bid values to encourage expansion. This change replaces the previous bonuses, which lawmakers found insufficient for driving growth.

To further boost development, the maximum bid cap for general ground-mounted solar projects has increased from 20 MW to 50 MW, allowing for larger installations.

Additionally, Solarpaket 1 prioritizes environmental conservation by setting minimum ecological standards for all subsidized ground-mounted PV projects (excluding special solar plants). Developers must meet at least three out of five criteria, such as biodiversity-focused maintenance, maintaining wildlife passages, and limiting coverage to a portion of the project area.

Rooftop PV plants

For larger rooftop solar installations, Solarpaket 1 introduces a new requirement: systems over 750 kW now need to participate in the EEG tender process to qualify for financial support. Smaller rooftop setups remain unaffected by this rule, keeping them highly accessible.

To meet growing interest, especially on commercial and residential rooftops, the package also plans to double the tender volume by 2026. This boost is expected to drive more businesses and property owners toward solar, especially as installation costs start to level out.

Energy storage systems

Energy storage is getting a big boost under Solarpaket 1. The new rules make it easier for operators to use storage flexibly, allowing them to switch between storing green energy and grid electricity without losing out on renewable subsidies. Previously, they could only store renewable energy to qualify for support, which limited how storage systems could be used.

Now, storage operators can choose “mixed use” mode for up to five months each year, with the option to switch back and forth between modes up to five times, staying in each mode for at least two months. This makes storage systems more adaptable, helping meet changing energy needs while still benefiting from support incentives.

Grid connections

Solarpaket 1 brings significant progress in grid accessibility, particularly for public lands. Under the new rules, public landowners are now legally required to allow grid connection cables for renewable energy projects, including solar and energy storage. This right also extends to public roads, with exceptions only for national and defense interests. A one-time payment of 5% of the land’s protective strip value is provided to compensate landowners.

For private landowners, though, grid connection access remains a voluntary decision, meaning developers must still secure agreements individually. Additionally, the updated Technical Connection Rules (TCR) aim to simplify and standardize the grid connection process. By making these technical requirements easily accessible on a central platform, Solarpaket 1 enhances transparency and smooths project planning for developers.

What are the limitations of Solarpaket 1?

While Solarpaket 1 introduces influential incentives, it does have its limitations. One notable omission is the resilience bonus for the domestic solar industry. This subsidy was proposed to support German solar manufacturers competing against cheaper solar modules from countries like China. 

Ultimately, the government decided not to include the resilience bonus in the package. Instead, they plan to support the industry by fast-tracking the implementation of the European Net-Zero Industry Act. This move aims to strengthen the domestic solar sector without adding financial pressure on electricity customers.

The absence of the resilience bonus may be a setback for local manufacturers, but Solarpaket 1 still provides substantial support for Germany’s growing solar industry.

Key takeaways

With Solarpaket 1, switching to solar in Germany has never been more accessible or appealing for companies. Thanks to increased feed-in tariffs and simplified rules for rooftop and ground-mounted PV installations, solar is now a realistic and cost-effective option for businesses eager to cut energy costs while supporting the clean energy transition. 

The updated support for energy storage and more accessible grid connection standards also smooth out logistical issues, making integrating solar power into everyday operations easier.

Switching to solar is more than a win for the planet; it’s a smart move for companies aiming to boost sustainability, cut energy costs, and contribute to Germany’s climate goals. 

Businesses investing in PV systems can raise their ESG ratings, lower operational costs, and attract eco-conscious customers. In an expanding green economy, going solar offers a competitive edge that goes beyond just savings.