Katherina Reiche's Solar Trap

Contents

On September 11, 2012, Federal Environment Minister Peter Altmaier stepped up to the podium in the German Bundestag and began a speech that summarized the work of his ministry. The summer break was over, budget week was approaching, and the ministries had to report in turn. At 1:02 PM, Altmaier reached what he considered a central problem that his department had successfully tackled. It was about the rapid expansion of photovoltaics: “You all know that the expansion figures have recently been three times higher than planned in the federal government's Renewable Energy Concept. We then decided on a bold reform, the effects of which no one knew. We still don't know.” Just imagine: Private homeowners and companies had, in his view of the data, shamefully overfulfilled the government's expansion targets, meaning they had built more photovoltaics, and had thus carelessly endangered the security of supply for the entire country! “But I have the figures now,” Altmaier rejoiced, pulled out a small slip of paper, and read out his political success: “After a record expansion in June of 1800 megawatts, the figures in July were 540 megawatts and in August 320 megawatts. This is below the much too high expansion rate of last year. This indicates that the law we jointly adopted is beginning to work.” The stenographic record of the 190th session notes: “Applause from the CDU/CSU and FDP.” The video of the speech is preserved in the Bundestag's media library.

The bold reform cited was the unscheduled reduction of the guaranteed feed-in tariff for PV systems, which had come into force retroactively from April 1 at the end of June. A flat 15 percent less for new systems. Until then, a linear reduction was planned, which considered the decreasing acquisition costs. What followed was what would go down in history as the Altmaier dip. It was the political double blow of a drastically reduced tariff and the persistent narrative that too much PV electricity was harmful to the grid that radically delayed expansion. In the process, it sustainably ruined the perpetrator, namely the domestic photovoltaic industry. The electricity providers breathed a sigh of relief, while Chinese manufacturers took over the global market for photovoltaics. Germany continued to buy and burn coal and gas.

Old Acquaintances

Involved in this questionable political success was a Parliamentary State Secretary in Altmaier's ministry. She defended the upcoming reduction in the tariff in parliament at the beginning of 2012 and was likely involved in the preparation of Altmaier's speech on September 11. The rising politician had been State Secretary in the Ministry of the Environment since 2009. Her name, you've surely guessed it already, is Katherina Reiche.

In September 2015, she left the Bundestag, and her tireless commitment to the welfare of conventional electricity providers was not to go unrewarded. As early as February 2015, while still a member of the Bundestag, she was appointed Chief Executive Officer by the “Association of Municipal Enterprises.” This is an interest group, which includes municipal energy suppliers as members – hardly the working group of friends of renewable energy. The revolving door between politics and business rotated smoothly at the time. In 2020, Reiche then landed in the management of E.ON subsidiary Westenergie. She only gave up this position when party friend Friedrich Merz set the tried-and-tested revolving door back in motion in 2025 and offered her a ministerial post.

As Minister of Economic Affairs since May 2025, she has consistently continued what she began in the Ministry of the Environment in 2009, attempting from day one in office to slowly turn sentiment against photovoltaics again. And so the news from the ministry should surprise no one. Not with heating, not with the expansion of power grids, not with photovoltaics and storage. After all, from her perspective, she took over the mess of her political legacy: Citizens and companies had, in her absence, starting in 2022 with Russia's war of aggression against Ukraine, which led to increased energy costs, again invested massively in photovoltaic systems – without asking the struggling electricity providers for permission. Meanwhile, the political opposition had lowered the bureaucratic hurdles in several solar packages. The beautiful Altmaier-Reiche dip threatened to be crushed between political reforms and the expansion frenzy of roof owners. In 2024 alone, according to the Federal Network Agency, over 16 gigawatts of PV were installed – in Altmaier's time, the record installation of 7.5 gigawatts in 2011 already caused nervousness in the ministry.

Happily Onward

Reiche did not accept these setbacks of the recent past. Her latest plan has not yet been published; only a draft has been leaked from the ministry to various media outlets, including Der Spiegel and dpa. The fixed feed-in tariff for small systems up to 10 kW, currently a manageable 7.78 cents, which is guaranteed for 20 years, is to be abolished, according to the media. There is not much room for reduction here anymore. In addition, new systems already receive no remuneration today in times of negative stock market electricity prices and require a networked electricity meter.

Since Reiche also knows that the revenue from feed-in tariffs for private rooftop systems does not represent the biggest lever and that systems are primarily designed for self-consumption, she is choosing a different adjustment screw for decreasing attractiveness: complexity and bureaucracy. Until now, the distribution network operators, often the local municipal utilities, have automatically handled the marketing of electricity on the stock exchange for small producers. As a homeowner with PV on a single-family house, one did not have to deal with the electricity market. If the stock market electricity price was below 7 cents, the EEG account was used to compensate; if it was above, money was paid into the EEG account. This account is topped up by the state from tax revenues if there is a shortfall. According to the draft, this flat-rate processing is to be abolished, and small system operators will also have to find a so-called direct marketer. This is a private electricity trader who markets the energy for a few percent administrative fee. A charming advantage for the municipal utilities, whose interests Reiche has represented for years: less administrative effort – and at the same time less planning security for small operators.

Don't Fall into the Trap

The first commentators have already fallen for this leaked information, even speaking of the “solar hammer” and thus surely falling into Reiche's trap: the narrative that private photovoltaics on the house roof is not worthwhile is to spread – that seems to be precisely the point. If this becomes known, demand will decrease, installation companies will reduce capacity, and perhaps disappear from the market. Decentralized photovoltaics in the hands of citizens will decrease, and large operators who build solar farms will increasingly earn money from solar power.

The truth, on the other hand, is: private PV on one's own home is worthwhile regardless of the feed-in tariff. It just needs to be designed so that it pays for itself through self-consumption at current or expected electricity purchase costs. Because electricity from renewable sources is unbeatable cheap, especially compared to purchased electricity from the grid. Anyone who invests today is instantly buying a large part of their electricity needs for the next 20 years. Every euro from feed-in is a nice bonus, but not decisive. Operators can and should optimize their consumption the most by also switching the mobility and heating sectors to electricity: heat pump instead of gas heating, air conditioning for the home office, electric car with its own wallbox instead of an internal combustion engine.

Anyone who claims that private photovoltaics are dead without a fixed tariff is helping to stifle expansion once again. Katherina Reiche may have succeeded in the historic feat of making the same political mistake twice within 14 years! Her old employers like that.

(jam)