Just as nature often falls calm before a storm, Germany is currently experiencing a period of apparent inactivity, particularly within the governing coalition when it comes to legislative reforms in the energy sector. Instead of swiftly finalizing reforms that would at least avoid undermining the renewable energy sector and secure approval from the relevant authorities, the government appears more focused on making concessions to major players in the fossil fuel industry.
Whether deliberately or through sheer irresponsibility, the federal government is delaying necessary decisions and postponing the finalization of the EEG 2027, Germany’s Renewable Energy Sources Act, and a package of measures concerning the electricity grid. This is fueling uncertainty about the future and threatening the viability of numerous business models and the companies that depend on them. The question is whether this is merely a passing shower or a major storm brewing on the horizon.
Solar module price trends this month, by contrast, resemble a gentle breeze, offering some relief. Price reductions in the Full Black and Mainstream categories have been marginal, while prices in the other two categories have remained unchanged. A slight increase in demand in the second half of the year has been met with generally good module availability. As a result, the market is experiencing neither significant oversupply nor shortages, apart from certain ultra-high-efficiency products. Although the overall trend remains slightly downward, manufacturers are not expected to make any further significant price cuts before the end of the year.
The situation is quite different for energy storage products. For years, battery prices moved in only one direction: downward. Lithium iron phosphate (LFP) batteries, in particular, benefited from steadily declining costs thanks to improvements in energy density and economies of scale. However, prices now appear to have reached a floor. Rising energy and transportation costs are prompting manufacturers to introduce significant price increases for the first time. These increases have been announced gradually over recent months, and by January at the latest, products from various brands are expected to cost more than they do today, at least in the residential storage segment. As wholesalers, we are preparing for a sharp increase in demand toward the end of the year.
This tendency to bring forward purchases, along with similar developments, is currently boosting order books across the sector. But how long can this surge last? Until Christmas, or perhaps even into the first quarter of 2027?
A more serious storm is brewing over the European Commission’s state aid approval for the planned reform of Germany’s Renewable Energy Sources Act (EEG). If approval is not secured in time, there is a risk that subsidies for solar power could be suspended from Jan. 1, 2027. The current authorization expires at the end of this year. If the new legislation is not adopted and submitted to the European Commission in time, new solar projects could face considerable legal and investment uncertainty, particularly those that depend on public subsidies or the financial security provided by guaranteed support mechanisms. This would primarily affect medium- and large-scale, debt-financed PV installations, while conventional residential systems designed for self-consumption would be less exposed.
Nevertheless, I believe a market-wide downturn cannot be ruled out. Some competitors I have spoken with are less pessimistic. They point to a growing number of large-scale, subsidy-free solar projects that can operate profitably without EEG support. In the small and medium-sized segments, too, emerging business models and service providers, including those offering direct marketing services, suggest that new installations could remain economically viable.
However, every installation needs a grid connection, and the process of securing one should be as straightforward as possible. Unfortunately, despite the stated political goal of reducing bureaucracy, more and more obstacles are being introduced. These additional requirements impose costs on system operators, potentially making many projects economically unviable.
Prices in November, including changes from the previous month (as of Nov. 10).
Author: Martin Schachinger
Martin Schachinger has studied electrical engineering and has been active in the field of photovoltaics and renewable energy for almost 30 years. In 2004, he set up the pvXchange.com online trading platform. The company stocks standard components for new installations and solar modules and inverters that are no longer being produced.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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