What will happen to solar power once the feed-in tariff under the German Renewable Energy Source Act (EEG) runs out? We spoke to Flavia Röhrs, Direct Marketing Expert at bne about why direct marketing will be key for new PV installations from 2027 onwards, why it generally remains unfeasible for small-scale systems, and what regulatory changes are urgently needed. A sober look at the opportunities and hurdles, and the risk of leaving valuable solar power unused.
Mrs. Röhrs, why should we take an interest in direct marketing?
Anyone who is planning to install a PV system on their roof should take an interest, as the EEG feed-in tariff is set to expire in 2027. Direct marketing will become relevant for all new solar installations with an output of up to 25 kilowatt, excluding balcony solar systems. The old “produce-and-forget” model – in which excess solar power fed into the grid is remunerated at a fixed rate under the EEG while transmission system operators market it on the power exchange – is coming to an end.
How does direct marketing of solar power actually work?
Direct marketing basically means that electricity from renewable energy plants (RE plants) is no longer remunerated via a fixed feed-in tariff, but instead sold on the power exchange, as has long been the standard for ground-mounted PV systems. From a financial standpoint, it is impossible for a private person with a small RE plant to engage in direct marketing on the energy exchange. Service providers can handle the direct marketing of electricity on behalf of plant operators.
Is direct marketing worthwhile for small plants?
Generally, service providers pay plant operators the market value for each kilowatt hour of electricity. Direct marketers take on all the risks of marketing, including forecast discrepancies or plant failure. For this they usually charge a fee of around 50 euros a month, as well as a one-time set-up fee of around 200 euros. Then there is the set-up and cost of a smart meter, which is pretty reasonable, at 30 euros per year.
When it comes to small PV installations, it is currently not very profitable for direct marketers to market their low electricity volumes, nor is it worthwhile for plant operators to switch to direct marketing. The market is basically nonexistent at the moment.
Yes, one alternative is prosumer marketing. It also requires a smart meter and the customer’s standard load profile needs to be set to quarter-hourly balancing. Once these conditions are met, electricity suppliers provide power to the customer and purchase any surplus electricity they generate. It is already worthwhile for customers who have a storage device along with their PV system. They can feed in electricity when the electricity spot price is high and either store or use it when the price is low. Prosumer marketers are responsible for both selling and supplying electricity.
What needs to happen for direct marketing to become viable for small systems on a large scale?
Direct marketing of small PV systems with storage devices is generally a financially attractive option because the storage devices can also generate revenue through flexibility, which is not possible with feed-in tariffs. They can store solar power when it peaks at midday and then sell it for a high price in the evening when everyone comes home to cook.
Switching to direct marketing and fully flexible marketing of storage systems is a complex process. Plant operators and direct marketers must rely on their distribution system operator (DSO) to cooperate with them. Six steps of the process – including installing a smart meter and determining a Market Location ID, as well as balancing feed-in and consumption based on quarter-hourly data – often cause massive delays. It can take up to 12 months for a plant to switch to direct marketing, during which it loses revenue.
No, there are currently three possibilities planned for new PV systems. They will be able to choose between zero feed-in, selling to the grid operator and direct marketing. If they opt for zero feed-in, they use the electricity from their PV system only for themselves and do not feed anything into the grid. If they sell the electricity to the grid operator, they are practically giving it away for free. And for direct marketing they need to install a smart meter and enable quarter-hourly balancing, with all the challenges that entails.
In the long term, we need to assess whether market access and balancing could be organized through a central entity, without involving the 860 DSOs. However, we will not be able to implement this before the end of 2026. In the short term, we propose strengthening the existing processes by setting an ambitious deadline and imposing sanctions for non-compliance.
I think the rooftop PV sector will be the first to feel the impact. But as time goes on, direct marketing for small-scale systems will become easier, making the market more attractive. Until then, people will invest in balcony solar systems and possibly balcony storage devices or in complete solutions such as PV system plus storage or PV system plus EV charger plus e-car. But it all depends on whether the legal and regulatory framework conditions allow for a market to be established. If not, people with new systems will opt for zero feed-in, discarding electricity that a neighbor could use. That would be the worst case.
Existing systems have nothing to worry about – they are grandfathered.
For standalone PV systems it will be better to stick to the EEG feed-in tariff. If they are combined with storage systems direct marketing can be worthwhile, but it requires effort and the waiting times are long. At bne, we want this to change.
The EEG subsidy was a blessing for the energy transition and made a lot of sense, so repealing it suddenly and without working alternatives is a grave political mistake. For solar installers it is a catastrophe. We are advocating for a transitional tariff that slowly decreases, giving grid operators time to adjust and digitalize their processes so that direct marketing, dynamic electricity tariffs and grid-interactive storage systems become simple and attractive solutions for them.
If you take away someone’s means, you have to create an alternative. If Ms. Reiche wants to endorse the energy transition, she has to make direct marketing feasible. That is not the case right now. A direct marketer tariff needs to be established in a way that it can be found just as easily as electricity tariffs on price comparison websites like Verivox.
