Dark clouds gather over Germany’s solar sector

Germany’s governing coalition has delayed finalizing the EEG 2027 and grid-related measures, creating uncertainty for renewable energy businesses. The government’s focus on concessions to fossil fuel industries has postponed critical decisions, risking the stability of solar sector business models. Analysts warn this delay could either be a temporary lull or signal deeper regulatory challenges ahead for the industry.

Solar module prices have seen only marginal reductions in recent months, with Full Black and Mainstream categories experiencing minor decreases. Demand has risen slightly in the second half of the year, and module availability remains generally good, preventing significant oversupply or shortages. Manufacturers are not expected to implement further major price cuts before year-end, maintaining a slight downward trend.

Energy storage product prices, particularly lithium iron phosphate (LFP) batteries, have reached a floor after years of decline due to rising energy and transportation costs. Manufacturers have begun introducing price increases, with residential storage segment products expected to cost more by January. Wholesalers anticipate a sharp increase in demand before the end of the year as buyers rush to secure current prices.

The European Commission’s state aid approval for Germany’s EEG reform is at risk, with subsidies for solar power potentially suspended from January 1, 2027 if approval is not secured. Medium- and large-scale, debt-financed PV installations would face legal and investment uncertainty, while residential systems for self-consumption may be less affected. Additional bureaucratic obstacles are increasing costs for system operators, further threatening project viability.