Solar Package I - Overview of Changes to Ground-Mounted and Building-Mounted PV Systems

On 16 May 2024, the so-called “Solar Package I” came into force after almost a year of lengthy negotiations. It had previously passed through both the Bundestag and the Bundesrat on 26 April 2024. In addition to amendments to the Energy Industry Act (EnWG) and the Metering Point Operation Act (MsbG), Solar Package I also includes extensive changes to the Renewable Energy Sources Act (EEG).

The legislative package is intended to promote the expansion of solar technology in Germany in order to achieve the target of 215 GW of solar capacity by 2030. To this end, a large number of legal amendments and simplifications have been adopted, which affect the wind and storage industry in addition to photovoltaic systems. According to the BMWK (Federal Ministry for Economic Affairs and Climate Action), Solar Package I implements key parts of the BMWK’s photovoltaic strategy.

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

New regulations relevant to building-mounted PV systems

• New options for rooftop power supply contracts (on-site power purchase agreements or PPAs)

For the first time, Solar Package I creates the possibility for onsite PPAs to also be subsidised for commercial properties under the EEG (so-called tenant electricity subsidy). However, the prerequisite for this is the assumption of a full supply to the tenant and an adequate metering concept. Those finding this too cumbersome can now fall back on the new contract type of the so-called joint building supply (Section 42b EnWG). The advantages of the new contract type are that minimum contract content, billing requirements, electricity labelling and full supply obligations are (in part) no longer applicable. In contrast to the original draft, the maximum initial contract term of two years for commercial customers has been removed, meaning that long-term contract terms are now also possible.

• Lowering the tendering threshold / new remuneration rates / full feed-in

After the threshold for the obligation to participate in an EEG tender to receive the market premium was first raised to 1,000 MW in 2023, it will now be lowered again to the previous value of over 750 kW under Solar Package I. For systems below this threshold, however, the statutory remuneration rates in the output range between 41 kW and 750 kW will increase by 1.44 cents/kWh. In addition, Solar Package I provides simplifications for rooftop PV systems up to a maximum of 750 kW for so-called full feed-in; in particular, the avoidance of system aggregation has now been extended to several roofs of different buildings.

• Increasing the threshold for the direct marketing obligation

The previous limit of 100 kW for the direct marketing obligation has been raised to 200 kW, at least if the surplus electricity is fed into the grid free of charge.

• Clarification on repowering

It has already been possible to replace old modules with more powerful and more efficient modules without losing the original remuneration. In the case of repowering, however, the subsidy entitlement is only extended to the proportion of the output that corresponds to the original output before the replacement. In practice, there have been uncertainties because the relevant standard was located in the section for ground-mounted solar. It has now been clarified in Solar Package I that this also applies to rooftop PV systems.

• Increase in the performance limit for system certificates

System certificates are no longer required for systems with a feed-in capacity of up to 270 kW or an installed capacity of up to 500 kW. Simplified verification using unit certificates is sufficient.

• Electricity tax relief

In addition to Solar Package I, a comprehensive draft bill to amend the electricity tax law was recently published, which provides further relief for rooftop PV systems, but which still has to go through the legislative process.

New regulations relevant to ground-mounted PV systems

• Increase in the performance limit for bids

With Solar Package I, the upper limit - up to which ground-mounted systems are subsidised - was raised from 20 MW to 50 MW, after the limit had initially fallen from 100 MW to 20 MW at the beginning of the year.

• Minimum criteria for ground-mounted PV systems

With immediate effect, all ground-mounted PV systems must fulfil minimum nature conservation criteria in order to receive an EEG allowance. Operators can choose from a catalogue of five minimum criteria and must guarantee to fulfil at least three of these criteria as part of the tendering process. Corresponding criteria have also been added for plants under 1 MW. The aim of these requirements is to make subsidised ground-mounted systems more compatible with nature and the landscape.

• Smaller area for disadvantaged areas in the new federal states

The funding options for ground-mounted systems in so-called disadvantaged areas have now been significantly restricted if they are located in an area relevant to nature conservation. In addition, the federal states have been given new powers to further restrict the eligible area. For federal states in which funding for ground-mounted systems in disadvantaged areas was previously not possible at all (e.g. Mecklenburg-Western Pomerania or Brandenburg), the legislator has now stipulated a certain minimum area as eligible for funding.

• Obligation to tolerate connection with the grid

The original draft envisaged an obligation for landowners to tolerate connection with the grid (laying, construction, maintenance, repair, protection and operation of grid connection lines). The version of Solar Package I that has now been adopted slims down this obligation to tolerate covering just publicly owned land. The same applies to the right to drive over and swing over land during the construction and dismantling of wind turbines.

• Changes to agrivoltaics

A special tendering quota and a separate maximum limit of 9.5 Ct / kWh (2024) will be introduced for agrivoltaics within the normal tendering procedure for ground-mounted systems. A mandatory requirement for participation in this sub-segment is a minimum elevation of 2.1 metres or 0.8 metres (for vertical systems). However, the previous additional bonuses for agrivoltaics will no longer apply.

Battery storage

• Levelling up in grid connection

A new regulation in the Energy Industry Act means that the grid operator may no longer give priority to connecting renewable energy systems over (grey electricity) battery storage systems when connecting them to the grid. This is a first step towards harmonisation. However, grid-connected battery storage systems still do not enjoy the special advantages of a renewable energy connection in accordance with Section 8 EEG or the exemption from construction costs for renewable energy systems.

• Levelling up with renewable energy systems

Until now, battery storage systems were only considered renewable energy systems if it was technically ensured that they were fed 100% with electricity from directly connected renewable energy systems. Solar Package I provides for some leeway in this regard. In future, it should initially be possible to switch between grey and green electricity storage systems every two months during the year without losing their status as a renewable energy system. In the final phase, it should be possible to divide the amount of energy stored over time between grey and green. However, the new regulations are subject to a decision by the Federal Network Agency.

• Electricity tax relief

In addition to rooftop PV systems, battery storage systems are also significantly affected by the recently published electricity tax amendment alongside the Solar Package I. According to this, the (partial) electricity tax exemption for battery storage systems is to be revised in order to avoid double taxation. In addition, the (previous) utility status of battery storage systems is to be cancelled in certain constellations.

Preliminary assessment

PV growth has already risen to 14.1 GW in 2023. This is almost double the figure for 2022, but an annual expansion of around 19 GW is required to reach 215 GW by 2030. Solar Package I makes an important contribution to this. The increase in the bid volume from 20 to 50 MWp, which allows project planners to promote more cost-efficient systems, and the contractual simplifications for on-site PPAs are particularly welcome. The new provisions for disadvantaged areas and for agrivoltaics, on the other hand, are a double-edged sword of relief and worsening compared to the previous status quo. The restricted right to lay cables and cross land is also criticised by project developers as not being very practical, but is welcomed by farmers’ associations. Similarly, the changes for battery storage are certainly a step in the right direction, but certainly not yet the big leap forward for implementing the electricity storage strategy. Overall, however, we believe that the solar package should be welcomed as positive, even if there are growing calls for the implementation of the Solar Package II that was originally announced. A motion for a resolution published in parallel by the coalition parliamentary groups holds out the prospect of a Solar Package II being adopted before the end of this legislative period.