The Bundesrat has given the green light to the ‘Solarspitzen‘ or Peak Solar Law in English, a key measure for regulating the photovoltaic market in Germany. The legislation introduces new conditions for project financing, establishing a mechanism that suspends financial incentives when electricity prices on the stock exchange turn negative. Additionally, it accelerates the installation of smart meters and introduces measures to ensure greater stability in the electrical system.

Two weeks after its approval in the Bundestag, the Federal Council decided not to convene a mediation committee, allowing the regulation to come into effect immediately after its publication in the Federal Gazette. The new legislation was spearheaded by the minority governing parties, the SPD and Greens, and secured additional backing from the CDU/CSU in Parliament.

Financing Conditional on Negative Prices

One of the most significant changes is the suspension of subsidies under the Renewable Energy Act (EEG) for new photovoltaic installations with a capacity of 2 kW or more if electricity prices on the stock exchange turn negative. This measure aims to prevent artificial economic incentives during periods of solar energy oversupply and stabilise the market.

According to an information leaflet published by BSW-Solar, this reform is intended to provide greater predictability for investors and prevent price distortions in the electricity market. However, some experts warn that this could impact the profitability of new photovoltaic projects and discourage investment in certain regions.

Additionally, to offset changes in incentives, the law introduces a compensation mechanism that will allow an extension of solar plant remuneration beyond the initial 20-year period.

Accelerating Digitalisation and Solar Plant Control

Another key aspect of the legislation is the mandatory installation of smart meters. The law requires that 90% of newly installed photovoltaic capacity by September 2026 be equipped with smart meters by the end of that year. This requirement addresses the need for better management of solar energy generation and its impact on the electricity grid.

According to BSW, digitalisation will allow for optimised use of generated energy, avoiding production peaks that could create grid imbalances. However, installation costs for these devices will increase, posing a challenge for small-scale solar producers.

Low Risk of Blackouts Due to Excess Solar Energy

Despite some concerns expressed in the media regarding potential overloads in the electricity grid due to increasing solar production, the German Solar Industry Association (BSW-Solar) asserts that the risk of blackouts is minimal. According to a recent press release from the organisation, both existing regulations and the new provisions under the Peak Solar Law ensure grid stability, even during periods of high photovoltaic generation.

Carsten Körnig, Managing Director of BSW-Solar, clarifies: “The claims that an increase in grid frequency could trigger massive failures in photovoltaic systems are incorrect”. He emphasises that, since 2012, solar inverters have been designed to gradually adjust their output power according to grid frequency, rather than shutting down abruptly.

Similarly, Professor Bernd Engel, from the Elenia Institute at Braunschweig Technical University, highlights that modern photovoltaic systems are equipped with mechanisms that regulate energy injection gradually, preventing sudden fluctuations in the grid. This, combined with over 10 GW of battery storage capacity, helps stabilise grid frequency and mitigate any potential imbalance.

With the approval of the Peak Solar Law, requirements for solar system controllability have been reinforced, and grid operators will now be responsible for periodically verifying that photovoltaic systems comply with these standards. These measures strengthen photovoltaic integration and further reduce grid instability risks, ensuring that the rapid growth of the photovoltaic sector continues without compromising energy supply security.

Regulation of Energy Storage and Injection Limitations

Under the new law, photovoltaic systems under 100 kW without control equipment must limit their energy injection to 60% of their capacity. This change aims to reduce midday generation peaks, when photovoltaics production reaches its highest levels.

However, BSW notes that intelligent storage systems will not suffer major losses, as they can redirect excess production towards self-consumption or battery storage. A study conducted by Berlin University of Applied Sciences indicates that energy generation losses due to this limitation will range between 1.1% and 9%, depending on panel orientation and the presence of storage capacity.

Additionally, the law introduces new energy storage commercialisation options, enabling storage systems to operate flexibly in response to market signals.

Long-Term Goal: 400 GW by 2040

Germany currently has an installed photovoltaic capacity of approximately 100 GW, but the Peak Solar Law reinforces the government’s commitment to increasing this figure to 215 GW by 2030 and 400 GW by 2040.

However, the expansion of solar energy presents technical challenges, such as the need for greater storage capacity and more flexible energy consumption. To prevent grid overloads, the law allows grid operators to temporarily disconnect certain systems in cases of severe imbalances between supply and demand.

Despite the restrictions introduced, BSW-Solar considers the law to be an unavoidable adjustment to ensure a sustainable photovoltaic expansion while maintaining market stability.