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ENERGY

German government pledges to subsidise rising electricity bills

For most electricity customers in Germany, grid fees are set to rise next year. But the government plans to inject €13 billion to ease the burden on consumers.

Published: 6 October 2022 10:22 CEST
A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany.
A few lights on in a Leipzig housing block. Electricity prices have been rising in Germany. Photo: picture alliance/dpa | Jan Woitas

The four major transmission system operators (TSOs) said the price of grid fees would be set at an average of 3.12 cents per kilowatt hour next year, slightly higher than the current average of 3.08 cents/kWh. For the first time, the cost will be at the same level across Germany.

Grid fees form part of the electricity bills paid by consumers, along with other taxes and production costs. The charges make up about 10 percent of private customer bills. 

Those who live in the area of the network operator Tennet, which supplies Lower Saxony, Schleswig-Holstein and parts of Hesse and Bavaria, can, however, expect a slight decrease in the network fee.

In the rest of the country, grid fees currently stand somewhere between 2.94 and 3.04 cents per kWh. The four TSOs – 50Hertz, Amprion, Transnet BW and Tennet – said the price increases were due to the higher costs needed for procuring energy, following Russia’s invasion of Ukraine. 

READ ALSO: Why electric fan heaters could make energy crisis worse

The cost for transmission networks has more than tripled from €5 billion to €18 billion.

To ensure that grid fees for customers do not also more than triple, the German government has pledged to give a subsidy of €13 billion.

“We are now making sure that these cost increases are absorbed, thereby preventing an additional burden for industrial companies, small and medium-sized businesses and consumers,” said German Economic and Climate Minister Robert Habeck. “We will use almost €13 billion to keep costs down.”

He said this would be carried out in connection with the planned electricity price cap.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

The coalition government, made up of the Social Democrats, Greens and Free Democrats, is planning to dampen grid fees in the medium term by skimming off high windfall profits from electricity producers to fund a price cap. 

The money for the subsidy will also be covered by Germany’s Renewable Energy Act (EEG) funding. Electricity customers in Germany had to pay an EEG levy, aimed at boosting renewable energy, up until it was dropped earlier this year due to spiralling prices. 

The German Association of Energy and Water Industries (BDEW) called on the coalition to take action quickly and introduce subsidies.

“It is right that a state subsidy is planned for this exceptional situation,” said Kerstin Andreae of BDEW.

The significantly higher costs would otherwise lead to increased network fees that customers would have to pay, Andreae said. 

READ ALSO: German households see record hikes in heating costs 

Vocabulary 

Network fees/charges – (die) Netzentgelte

Electricity price – (der) Strompreis

Consumers – (die) Verbraucher

To increase/rise – steigen

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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CLIMATE CRISIS

How installing solar panels at home is set to become easier in Germany

As part of its drive to roll out renewable energy, Germany has passed a new law that will make it easier to install solar panels on your balcony. Here's what homeowners and renters need to know.

Published: 30 April 2024 09:22 CEST
How installing solar panels at home is set to become easier in Germany

With rising prices affecting almost every area of life, many people are looking for ways to cut costs wherever they can. 

When it comes to electricity, this could include looking at renewable options like installing solar panels on your balcony.

According to data from the Federal Network Agency’s Market Data Register, this is an increasingly popular choice. As of April 2nd this year, there were around 400,000 balcony solar units in operation in Germany, compared to just 230,000 in the summer of last year.

These little photovoltaic systems can be a great way to become more self-sufficient by producing your own energy for the home – but despite the benefits, you may have been put off by fears of mountains of paperwork and an uncertainty around the rules.

READ ALSO: How to install a solar panel on your balcony in Germany (even if you rent)

The government’s new Solar Energy Package, passed on Friday, aims to solve this issue by making it simpler for people in apartments or single-family homes to install solar panels and use their own energy.

It’s part of a major drive to roll out renewable energy in Germany, pushing up photovoltaic capacity from 7.5 gigawatts in 2022 to 22 gigawatts in 2026 and ultimately 215 gigawatts by 2030. 

But what exactly is changing for homeowners and renters? Here’s what we know so far.

Streamlined registration process

Rather than having to register with your local network operator when installing solar panels on your balcony, in future simply registering with the Federal Network Agency’s Market Data Register will suffice. This streamlined process has been in place since April 1st, 2024. 

Increased capacity allowance

Solar devices installed in the home are allowed to be more powerful in future. If your future device has an installed output of up to 2 kilowatts and an inverter output of up to 800 volt-amperes in total, you can register it quickly in a simple and unbureaucratic registration process.

Previously, devices were only allowed an inverter output of up to 600 volt-amperes. 

No barriers on meters

In a transitional measure designed to encourage more people to switch to solar energy, balcony installations can be run through any type of meter on the market.

Solar panels on a German balcony

Solar panels on a balcony in Germany. The government is making it easier for people to produce – and use – their own solar energy. Photo: picture alliance/dpa/iStock.comMaryanaSerdynska | Maryana Serdynska

This includes meters without a backstop, which run backwards when more energy is produced than is used. These, alongside normal one-way meters with a backdrop, will be permitted for a limited time until modern digital meters can be installed. 

Under previous rules, both older types of meter were prohibited. 

Simpler energy storage

In future, balcony solar systems will be able to store energy with a conventional shockproof plug. This will make installation way easier than it was before.

READ ALSO: German government to subsidise up to €30,000 of heating revamp costs

Easier operation of multi-unit buildings

To enable tenants in apartment blocks to use cheaper solar power from roofs, garages or battery storage systems directly, the new instrument of “communal building supply” is being introduced. This eliminates the complicated requirement to feed energy into the general electricity grid and permits residents to use the energy generated themselves.

In future, tenants will also be able to take out an affordable supplementary tariff themselves for electricity that is not covered by their solar installation. Some rules on this still need to be clarified though, so watch this space. 

Tenant subsidies in commercial buildings

In future, tenant electricity will also be subsidised for commercial buildings and ancillary facilities such as garages if the electricity generated there is consumed immediately, i.e. without being fed through the grid.

This allows several energy systems to be combined and should avoid the overwhelming technical barriers that were previously a problem in residential neighbourhoods. 

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