In 2026, Germany’s energy transition is entering a new phase of maturity. Renewables have effectively moved from the margins to the centre of the country’s power system: in 2025, they supplied 57.2% of gross electricity generation. The installed solar capacity rose 11.8% year on year, with wind capacity climbing 7.2 %.
Yet, as renewable capacity surges, the focus of policymaking has begun to shift. Germany’s Minister of Economy Katherina Reiche is putting greater emphasis on system compatibility, supply security and closer coordination between grid and renewables build-out. The two institutions at the centre of that shift are the Federal Ministry for Economic Affairs and Energy (BMWE), which is driving both the next reform of Germany’s Renewable Energy Act (EEG) and the Grid Package, and the Federal Network Agency (BNetzA), which is preparing a rethink of the grid fee regime.
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Taken together, these reforms will determine how Germany’s power market works in practice. But the pace and direction of change are already unsettling investors, and the coming months will show whether Berlin can balance system integration with the confidence needed to sustain renewable investment.
Germany’s energy transition: The EEG reset
With the current funding regime under the Renewable Energy Act (EEG) expiring at the end of 2026, Berlin must have a new system in place before then. EU-level requirements are adding further pressure, reshaping how renewable support schemes – including claw-back mechanisms – must be structured going forward.
An initial draft was expected in Q1 2026, but the ministry has yet to deliver. A preliminary version was reported to have been leaked in March, and despite the ministry’s denials, subsequent public statements from ministerial staff have broadly aligned with the reported contents. Since then, The Ministry of Economy has published first drafts of the amendment to the Renewable Energy Sources Act and the grid package.
Reiche has stated repeatedly that she wants to move towards a more market-based system. For larger projects, Germany is expected to shift support away from fixed premiums towards two-sided Contracts for Difference (CfDs): installations above 100kWp would receive compensation when market prices fall below a defined reference level, and return excess revenues when prices rise above it – providing both downside protection and upside claw-back. A second likely shift concerns the structure of solar tenders. Policy is moving away from rooftop-led models towards utility-scale projects, ideally co-located with battery storage.
The political challenge is time. The new framework must also clear EU state aid scrutiny, leaving Berlin little room for delay or risk injecting fresh uncertainty into the investment pipeline.
The Grid Package raises new questions about access and priority
The Grid Package hit public view in February when a draft leaked, instantly alarming the renewables sector. Its goal is straightforward: better align grid expansion with the renewables build-out. In practice, though, it has sparked fresh doubts over bankability.
The core flashpoint: grid areas where over 3% of feed-in was curtailed last year could be flagged as “capacity-limited”. New renewables in such areas would lose priority grid access unless developers waive curtailment compensation payments. With no clear sense of how many grid areas would ultimately fall under this regime, the uncertainty alone is already cited by market participants as a factor in delaying investment decisions. According to initial analyses, up to 32GW of renewable energy projects could be affected – including around 9.2GW of already permitted PV capacity-putting investments of up to €4.9bn at risk, according to industry analysis.
If adopted, the draft would also allow grid operators to levy construction cost contributions on renewables, hitting project economics. More positively, it would push grid operators towards greater digitalisation, transparency and clearer disclosure of available grid capacity, a step that could help address one of the most persistent bottlenecks in the renewables rollout.
Again, the timing is tight. Further changes are likely; however, statements by the BMWE and Reiche again suggest that key elements of the leaked draft are likely to be retained. The draft is expected to be published around the same time as the EEG reform, adding to the pressure on policymakers and amplifying market uncertainty.
Proposed grid fees put project economics under pressure
With the stated aim of making renewables and battery storage contribute more directly to the cost of grid expansion, Germany is currently in the middle of a broad reform of its grid fee system as part of its energy transition.
As part of the broader grid fee reform process “AgNes”, the Federal Network Agency has recently set out its first orientation papers on grid fees for full-feed-in generation assets from low-voltage level upwards, including ground-mounted PV, rooftop systems as well as battery storage systems. Generally, the proposed framework combines a capacity-based charge to cover grid costs (with early estimates pointing to €4–7/kW), and a dynamic component tied to time, location and congestion, potentially charging market participants for worsening it or paying them for easing it.
The BNetzA’s proposals have already triggered strong criticism from across the industry, particularly as existing assets could be brought under the new grid fee regime retroactively, posing significant risks to the bankability and profitability of existing PV projects. While the BNetzA is considering some level of protection for assets awarded under state tenders, at least with respect to the capacity-based charge, this would not extend to the dynamic component, which is precisely where many market participants see the biggest uncertainty. Moreover, new one-off construction cost contributions for grid connections add further pressure on developers’ economics, piling onto already rising grid costs and delays.
Adding to the complexity, it remains unclear how AgNes interacts with the broader legislative grid package currently moving through the political process. The two tracks are running in parallel but are not fully aligned, and market participants are struggling to understand how the regulatory and legislative pieces will ultimately fit together – or which will take precedence where they conflict.
Implementation is targeted for 2029, with workshops ongoing and a mid-2026 update expected before the final call. While the process remains in the consultation phase and no final decisions have been taken, the direction of travel alone is already contributing to growing uncertainty among developers and investors.
Delays, distrust and drifting timelines cloud Germany’s energy reform agenda
Beyond the content of the individual reforms to Germany’s energy transition, the broader political environment inside the BMWE is itself becoming a source of uncertainty. The early leakage of draft texts on both the EEG reform and the Grid Package, rather than showcasing a well-managed legislative process, have been interpreted as highlighting internal tensions within the ministry. The leak reportedly prompted email account searches of officials, according to reporting by Der Spiegel, fuelling resentment and further eroding internal trust. This sense of mistrust is further compounded by ongoing personnel reshuffles within the ministry and reports that Reiche is considering increased use of external consultancies for selected tasks.
Meanwhile, political backing for the ministry’s course appears less than solid. Members of the coalition partner Social Democratic Party of Germany as well as parts of the Christian Democratic Union of Germany, Reiche’s own party, have voiced criticism of both the substance and direction of the ministry’s plans, adding another layer of uncertainty to an already complex reform process.
Recent opinion pieces by Reiche in leading German newspapers Handelsblatt and FAZ offer further insight into the minister’s current thinking, but little in the way of concrete policy direction. In her own words, the focus lies on ending “self-deception” in energy policy and pursuing greater “pragmatism, market rationality and technological openness”, while specifics on implementation remain scarce.
Rumours and shifting timelines are increasingly unsettling both project developers and investors, with key decisions now slipping further back despite the government having previously announced a cabinet agreement by the end of March. The original aim of passing the legislation before the parliamentary summer recess now appears increasingly unlikely, and with parts of the framework still requiring EU state aid approval, Germany’s renewables funding framework risks slipping into jeopardy, potentially creating a temporary gap in investment visibility if timelines continue to shift.
Germany’s renewable future hinges on 2026
The reforms now moving through Berlin point to a single conclusion: 2026 is a decisive year for Germany’s energy transition and its renewable energy sector. The market has already proved renewables are here to stay, now policymakers must deliver a framework that sustains growth without spooking investors.
That will require speed, coordination and regulatory clarity. EEG support, grid access, fees, and connection procedures cannot be reshaped in isolation if Germany wants to avoid sending conflicting signals to developers and financiers. For international players, the message is equally clear: Germany remains one of Europe’s most important renewable markets, but the next phase of its energy transition will depend less on ambition than on execution.
Get it right, and Berlin cements Germany’s role as a reference point for Europe. Get it wrong, and uncertainty stalls the investment Germany’s energy transition needs to hit its targets.
Frederik Koenig is CEO of CC: Collective.
