Anyone who generates solar power with a photovoltaic system on the roof of their home can expect average generation costs of around 10 to 15 cents per kilowatt-hour. This corresponds to a difference of 20 cents or more compared to the electricity price from the energy supplier.* These cost savings from self-used solar power could be reason enough to invest in a photovoltaic system, plus the climate protection provided by CO2-free solar power.

However, the German Solar Energy Society (DGS) e.V. observes that the Solar Peak Act, which came into force on February 25, 2025, is currently causing great uncertainty. Keywords such as negative electricity prices and throttling of output to 60 percent raise questions. The DGS, Germany’s first and oldest solar association, is therefore providing information on the most important facts and giving the all-clear.

“Photovoltaics continues to be financially worthwhile,” emphasizes DGS Managing Director Jörg Sutter, and offers another tip: “If you’re smart, use the photovoltaic system with a battery storage system and store the self-generated solar power during the middle of the day or use it for large electrical consumers like electric cars. Then the new law can even be beneficial.”

The law aims to reduce power peaks

The background to the Solar Peak Act is as follows: On sunny days, the approximately five million photovoltaic systems in Germany ensure a high supply in the electricity grid. Together with other power producers, demand for electricity is sometimes exceeded. This creates so-called power peaks, which occur primarily at midday due to high solar radiation. If power generation exceeds consumption, negative electricity prices are listed on the electricity exchange. Power producers then have to pay for their electricity to be taken instead of being paid for.

The previous federal government, consisting of the SPD, Alliance 90/The Greens, and the FDP, therefore wanted to minimize peak electricity demand, and operators of small photovoltaic systems should also contribute to this. The Solar Peak Power Act therefore stipulated that solar power would not be remunerated during periods when the electricity exchange price was zero or lower. This provides a clear incentive to use solar power in your home during such periods and not feed it into the grid.

Advantages of battery storage

However, the quarter-hourly periods without compensation are added to the regular 20-year period for the legally guaranteed feed-in tariff. “The new regulation is therefore not necessarily a disadvantage,” Sutter clarifies.

Those who temporarily store self-generated solar power in a battery during times of negative electricity prices or use it for large electrical loads suffer virtually no loss during that time and can still benefit from the additional 20-year grace period. This applies to standard systems with self-consumption. “The situation is different for south-facing, full-feed-in systems,” Sutter adds.

Important exceptions

There are still exceptions: Existing photovoltaic systems, new systems with less than 2 kilowatts of power, and new systems with less than 100 kilowatts of power that do not yet have a smart meter are exempt from the regulation. A smart meter is an intelligent measuring device through which the grid operator communicates with the photovoltaic system and can record the precise feed-in patterns. Therefore, a smart meter is required to implement the law in practice on this point, as is now also a control box for the regulation, although this often does not entail any additional expense. Anyone who installs a battery storage system or a wall box for their electric car is required to have such a control box installed anyway. This is then simply used for the photovoltaic system.

If a smart meter with a control box is installed along with the new PV system, the regulation in the Solar Peak Energy Act applies. If the system is built without a smart meter because this is not yet possible, the regulation only takes effect with the later installation of the smart meter and control box. “Depending on the responsible meter operator, this could be after a few weeks or even years,” explains photovoltaics expert Jörg Sutter.

Limiting feed-in power to 60 percent

However, the legislature has defined a transitional regulation for the time until then: For new systems with a capacity of up to 100 kilowatts that do not yet have a smart meter, a 60 percent capacity limitation will apply – until the smart meter is later installed.

In this context, Sutter points out an important point: The power limit is not a limitation of the generation capacity, but of the power fed into the power grid. If the photovoltaic system is operating at high power in sunny weather, only the feed-in to the grid may not exceed 60 percent of the module’s rated power. If a 10-kilowatt system is running on a sunny day with 9 kilowatts of instantaneous power, a maximum of 6 kilowatts may be fed in, but the remaining three kilowatts may be used for self-consumption—i.e., for direct electricity consumption, for temporary storage in the battery storage system, or for charging an electric car.

“This example makes it clear: Most new photovoltaic systems with battery storage, where the household has a certain electricity consumption, will in practice only rarely reach the control limit and thus hardly incur any financial loss,” Sutter summarizes.

To illustrate the difference between full feed-in systems with an ideal south orientation, he points to a study by the Berlin University of Applied Sciences (HTW). Simulated examples show that a south-facing full feed-in system could lose around nine percent of its annual yield, while an east-west-oriented system could lose only 1.1 percent.

“Currently, only this transitional regulation with the 60 percent reduction is being implemented in practice,” observes Sutter. However, starting in 2028, smart meters will also be mandatory for existing systems. By then, at the latest, the first regulation will become more widespread. Therefore, manufacturers of electricity storage and energy management systems are already working on new programming that can further mitigate the effects of the provisions of the Solar Peak Energy Act.

The German Solar Energy Society (DGS), which celebrates its 50th anniversary this year, provides ongoing information on current developments in the photovoltaic market. Further information is available online at https://www.dgs.de/ and in the free weekly newsletter, which can be subscribed to on the website.