Germany passes law to curb PV generation surpluses and negative pricing

Germany is poised to introduce new rules aimed at removing electricity peaks and negative pricing associated with excessive generation of solar power at certain times of day. The German parliament has approved the “solar peak” legislation that will remove feed-in tariff compensation at times of negative pricing, which occurs when PV systems generate more electricity than is consumed.

According to official figures, PV accounted for around 15% of public net electricity generation in Germany. The growing penetration of solar power has led to an increase in negative pricing. In 2024, 457 hours of negative pricing were recorded, the majority coinciding with PV generation hours. Until now, under Germany’s EEG renewables act, PV system owners have still been compensated during times of negative pricing, receiving a guaranteed feed-in tariff of €8.03 cents/kWh (US$8.41 cents/kWh) and, since February, €7.94 cents/kWh for plants up to 10kWp. But under the law, which could come into force at the beginning of March, operators of new PV installations will no longer be compensated during times of negative pricing. Systems that go online after the time of the legislation coming into force will also only be able to feed-in a maximum of 60% of the power they generated unless fitted with a smart meter.

The aim of the new rules is to avoid temporary production surpluses and negative pricing by encouraging system owners to feed in or use PV-generated electricity in ways that benefit the grid.