Feed-in Tariff (Einspeisevergütung) · Glossary

The feed-in tariff (in German: Einspeisevergütung) is a support instrument for electricity from certain generation installations. The operator receives a predetermined amount for every kilowatt-hour fed into the public grid. This entitlement usually applies for many years. In Germany the instrument became best known through the Renewable Energy Sources Act (EEG). For decades it has secured predictable revenues for operators of solar, wind, biomass and hydropower plants. Today, within the EEG it is only one of several so-called forms of sale (Veräußerungsformen) and mainly concerns small installations.

Basic principle: payment is for the energy fed in

What counts is the quantity of energy fed in, measured in kilowatt-hours. The installed capacity in kilowatts is not paid for. A 10-kilowatt photovoltaic system therefore does not receive money for standing on the roof. It receives money for the electricity it actually generates and delivers to the grid. An example: the system feeds in 6,000 kilowatt-hours in a year, and the rate is 7 cents per kilowatt-hour. The operator then receives about 420 euros. These figures serve for illustration only. The electricity that the household consumes itself is not included in this calculation. Installed capacity still plays a role: it determines which form of sale and which support rate are permissible for an installation.

Purpose: spreading risk and enabling financing

Wind and solar installations are expensive to build but cause hardly any fuel or other running costs. The wholesale market forms prices mainly on the basis of short-term marginal costs. For capital-intensive installations it therefore does not by itself provide reliable signals for investment. A fixed payment per kilowatt-hour largely relieves the operator of market price risk. Banks can then calculate the revenues better, and financing becomes cheaper. In this way technologies were able to grow before they were fully competitive under market conditions. Weather risk, by contrast, remains with the operator: little sun or wind means less feed-in and therefore less revenue.

Design under the EEG 2023

The EEG 2023 currently in force names three payment entitlements in section 19: the market premium, the feed-in tariff and the tenant electricity surcharge (Mieterstromzuschlag). Under section 21(1), an entitlement to the feed-in tariff exists only for calendar months in which the operator feeds in the electricity and makes it available to the grid operator. The law distinguishes four cases:

Installations of up to 100 kilowatts of installed capacity whose support rate is set by law: under section 53(1) the entitlement is reduced compared with the applicable value (anzulegender Wert). This is the classic case for small rooftop systems.
Installations of less than 200 kilowatts for which no other payment is claimed: the law calls this case "free-of-charge take-off" (unentgeltliche Abnahme). The grid operator takes the electricity, but the payment entitlement is zero.
Installations of more than 100 kilowatts receiving the fallback tariff (Ausfallvergütung): it applies for at most three months in a row and at most six months per calendar year, at a reduced rate. It bridges, for example, periods in which a direct marketer fails.
Installations whose support has ended (ausgeförderte Anlagen), i.e. whose original support period has expired: they receive a payment reduced under section 53(4).

Anyone using the feed-in tariff must, under section 21(2), hand over all of the installation's electricity to the grid operator. Excepted is electricity that is consumed in the immediate vicinity and not routed through a grid. In addition, the installation may not participate in the balancing energy market. In practice, larger new installations therefore end up in direct marketing with the market premium. For onshore wind and large solar parks, the level of support is moreover usually determined through a tender.

Who markets the electricity, who pays the difference?

Electricity paid under a fixed tariff also has a market value. The transmission system operators sell it on the exchange and keep a dedicated EEG account for this purpose. They pay the statutory remuneration to the operators. What marketing does not cover is the financing requirement. It depends strongly on the electricity price: for 2023, owing to the very high prices, the transmission system operators even expected a surplus. Marketing revenues of 13.1 billion euros were set against expected payouts and costs of 9.4 billion euros.

Previously, electricity consumers paid this difference through the EEG surcharge. From 1 July 2022 it was reduced from 3.723 to 0 cents per kilowatt-hour. With the Energy Financing Act (Energiefinanzierungsgesetz) it was abolished completely as of 1 January 2023. Since then the federal government has covered the EEG financing requirement, entirely from the federal budget. The expansion was announced as being funded via the Climate and Transformation Fund. The difference between market value and support entitlement therefore does not disappear. It is merely shifted from electricity bills to the state budget. The transmission system operators publish the financing requirement for the respective following year annually on 25 October.

Differences from related instruments

Feed-in rate: in everyday usage both terms are often used identically. More precisely, the feed-in rate denotes the specific rate in cents per kilowatt-hour. The feed-in tariff (Einspeisevergütung) refers to the instrument or the payment as a whole.
Market premium: here the operator or a direct marketer sells the electricity itself. In addition there is a sliding premium that closes the gap between market value and the applicable value. Forecasts, schedules and balancing energy then lie with the marketing side.
Tender: with an administrative feed-in tariff, the legislator sets the rate. In tenders, project developers compete by bidding for support entitlements. This is meant to reduce costs and steer volumes, but it places higher hurdles above all on small players.
Power purchase agreement: a power purchase agreement is a private supply contract between generator and buyer, not a state support rate. The contracting parties distribute the price risk among themselves.

Limits at high shares of renewable energy

A fixed payment per kilowatt-hour treats every feed-in equally, regardless of when and where it takes place. At small shares of renewable energy this is hardly a problem. At high shares, timing gains importance: on sunny middays a great deal of solar power depresses exchange prices, at times down to negative electricity prices. Fixed tariffs then create hardly any incentive to align installations, storage or consumption with surplus and scarcity. The tariff also does not reflect flexibility, site quality or grid bottlenecks. It does not decide on voltage or frequency maintenance. But it does shape where and how many installations are built. If many rooftop systems grow, for example, load flows in the distribution grid change. If wind power grows faster than the transmission grids, the need for redispatch rises.

The legislator has already adjusted course here. With the Solar Peak Act (Solarspitzengesetz), a stricter version of section 51 EEG has applied to new installations since 25 February 2025. For periods with a negative spot market price, the applicable value falls to zero, according to specialist sources already from the first negative quarter-hour. This applies to the feed-in tariff as well as to the market premium. As compensation, section 51a extends the support period by the unpaid times. For small installations there are transitional and exemption rules, depending among other things on the installation of a smart metering system. For older installations the rules of their year of commissioning continue to apply.

A common misunderstanding

Historical tariff rates are not the price of renewable electricity. They are guaranteed revenues for certain vintages of installations under the rules of the time. Early photovoltaic systems received high rates because the technology was much more expensive then. Later vintages managed with far lower values. Anyone who infers today's generation costs from old tariffs mixes up technology costs, support design and investment timing.

Current status: planned departure from the fixed tariff

At the end of July 2026 the Federal Cabinet adopted a draft for an EEG amendment. Under it, the fixed feed-in tariff for new installations is to be phased out gradually from 2027. According to media reports, new small solar installations are to receive only a transitional payment for 36 months instead of the previous 20-year fixed payment. After that, paid feed-in would only be possible through direct marketing. At the beginning of November 2026 the amendment had not yet been passed in the Bundestag. Disputes continued above all over the end of the fixed tariff for small and medium-sized solar installations. According to the known plans, existing installations enjoy grandfathering protection. How the rules ultimately look depends on the legislative process.

Overall, the feed-in tariff stands for a particular way of financing renewables: the state fixes the revenues, operators receive investment security, and a politically determined model distributes the costs. Its strength was predictable expansion. It reaches its limit where an electricity system with a high share of weather-dependent generation needs stronger signals in terms of time, location and market.

Sources

§ 21 EEG 2023 – Einspeisevergütung und Mieterstromzuschlag — Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de); unbekannt (konsolidierte Fassung, abgerufen November 2026). § 21 Abs. 1 Nr. 1–4 und Abs. 2
Energiefinanzierungsgesetz – Umlagepflichten und Aufsicht — Bundesnetzagentur; unbekannt. Einleitung der Seite
Überschuss aus dem Fördersystem des EEG im Jahr 2023 (Pressemitteilung) — Bundesnetzagentur; 2022-10-14. Pressemitteilung, Abschnitte zu Einnahmen und Finanzierung
Ehemalige EEG-Umlagepflichten und Leitfäden zur Eigenversorgung — Bundesnetzagentur; unbekannt. Abschnitt „Entfallen der EEG-Umlagepflichten“
Wirtschaftliche Auswirkungen des Solarspitzengesetzes auf Photovoltaik- und Windenergieanlagen an Land — Grant Thornton (Sekundärquelle); 2025 (genaues Datum unbekannt). Abschnitte zur Neufassung der §§ 51 und 51a EEG
Einigung zur Abschaffung der Einspeisevergütung in Sicht: EEG-Kompromiss liegt vor — t-online (Nachrichtenquelle, keine Primärquelle); etwa Anfang November 2026 (genaues Datum unbekannt). Abschnitte „EEG auf der Zielgeraden“ und „Einspeisevergütung soll abgeschafft werden“

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Edited by eCMS on 11.11.2026 19:43