The expansion of renewable energy in Germany is continuing, with strong growth in particular in solar photovoltaics (PV). In 2024, 16 gigawatts (GW) of new solar capacity was connected to the network, bringing total solar capacity to over 100 GW. More than 10% of the electricity consumed in Germany now comes directly from the sun. The increase in capacity is continuing at a rapid pace in 2025. This trend is leading to fast growth in solar generation and feed-in, bringing new challenges in terms of integrating the solar electricity into the market and safeguarding the stability of the electricity network.

Some of the solar installations, in particular small-scale installations, generate electricity from the sun irrespective of how much electricity is actually needed. These installations’ operators do not respond to price signals, but pass on any electricity they produce and do not need themselves to the operators of the networks to which their installations are connected, who then need to market the electricity.

The fact that installation operators do not have to worry about what happens to the electricity they feed into the network was part of the plan for all renewable installations in the first fifteen years of the energy transition. It was part of the package smoothing the way for the expansion of renewable energy: installation operators would take care of their installations, while network operators would take care of the electricity produced.

Renewable energy has been integrated more and more into the electricity market since 2012. At the beginning, installation operators could opt to switch to what is known as direct selling. Then, in 2014, direct selling became compulsory. At first, the requirement only applied to very large installations with a capacity of more than 400 kilowatts (kW). This limit was gradually reduced and is now 100 kW.

Operators of installations committed to direct selling “feel” the market prices and respond to the price signals. If more electricity is available than is needed, prices fall to zero or even below. Operators selling their electricity directly then reduce the amount of electricity they produce.

Installation operators who can still pass on the electricity they produce to their network operators do not feel the price signals. They carry on producing electricity when the sun is shining – even if there is no-one left who needs the electricity.

This can put a considerable strain on system stability on days when there is a lot of sunshine but not a lot of electricity is needed.
Easter Sunday 2025 is a good example of just how much electricity solar installations now produce. Between midday and 3pm, nearly all of the “grid load” – that is the total amount of electricity consumed from the electricity network in Germany (including pumped storage) – was covered by renewables. Between midday and 1pm, when solar generation peaks, the amount of electricity fed into the network by renewables alone was over 1 GW more than the total amount of electricity consumed, mainly due to solar installations. As conventional power plants were also feeding in electricity, Germany’s total generation was over 8 GW more than the country’s consumption (see chart below). This surplus electricity was traded and physically exported to Germany’s neighbouring countries.

Increasing solar feed-in can cause congestion in the network; uncontrolled solar feed-in can cause fluctuations in the system frequency.

Congestion

Regional networks in areas with high levels of sunshine, a high density of solar installations and a low load density can sometimes be stretched to their limits. Regional network infrastructure is not always designed to transport the large amounts of electricity that are produced locally if only a small amount of electricity is needed in the area. Congestion can occur around midday especially in rural areas, for instance on public holidays when demand from businesses and industry is low.

Network operators can intervene using a range of technical measures. If power lines are overloaded, they take what is known as redispatch measures. Feed-in from solar installations in front of the congestion is reduced (“negative redispatch”), while feed-in from other generating installations behind the congestion is increased (“positive redispatch”). The operators of the installations whose feed-in is reduced or increased are compensated as if there had not been any intervention.

In 2024 the volume of negative redispatch measures with solar installations amounted to about 1,400 gigawatt hours (GWh), which was almost twice the volume in 2023 (706 GWh). This volume is (still) relatively small compared with the volume of negative redispatch measures with other types of installations (12,935 GWh).

System imbalances

An imbalance between generation and consumption would destabilise the system frequency. The frequency has to be kept at a stable 50 hertz (Hz). If more electricity is fed into the network than is needed, the system frequency will go above this nominal level. However, the electricity network depends on having a very stable frequency, and even small deviations can have serious consequences. The system frequency is the same in the whole of Europe and only fluctuates by less than one tenth of a hertz above or below its nominal level. An increase in the system frequency to just 50.2 Hz triggers alert plans throughout Europe. If the frequency went even higher, most solar installations would gradually reduce their output automatically – that is very risky for stable network operation.

Transmission system operators can theoretically use what is known as balancing energy in addition to switching off generators. Balancing energy is the energy that network operators need to offset, or balance, unforeseen fluctuations in the frequency in their electricity networks. However, balancing energy is kept for unforeseen situations and should not be used to deal with solar peaks, which can be foreseen.
The most important instrument for avoiding system imbalances is the electricity market. If high levels of sunshine coincide with a low level of demand, the price of electricity in the electricity markets will fall to zero or even below. If prices fall to below zero, electricity producers have to pay customers for using their electricity. In situations like this, which are not unexpected when a lot of solar electricity is being produced, the market uses the flexibility of demand as much as possible. As Germany’s electricity market is closely linked to its neighbouring countries’ markets, a lot of electricity is exported when prices in Germany are negative or low. This helps to stabilise the markets and the electricity networks. Without the demand from other countries, Germany’s prices would fall even lower.

Operators of conventional power plants and all large renewable installations that are committed to direct selling have a high incentive to avoid situations like this from the start because they have to find a consumer in Germany or abroad for every kilowatt hour of electricity they feed into the network. By contrast, operators of smaller solar installations that feed their electricity into the network without having to worry about demand can become a risk to the stability of the system frequency. As the number of these small solar installations increases, so does the amount of electricity being fed into the network without responding to price signals, as does the problem of stability.

Network operators are allowed and required to take any measures necessary to keep the system frequency stable if there is the threat of a problem with stability. Most importantly, network operators are allowed and required to switch off any types of generating installations in this kind of situation – conventional power plants, wind turbines, combined heat and power (CHP) plants, storage facilities and, of course, solar installations as well. To do this sufficiently, network operators need to be able to control the installations.

In practice, however, only very few small installations can be controlled by the network operators. One reason is that there is no legal requirement: basically, installations with a capacity less than 25 kW do not have to be controllable. Another reason is that a lot of network operators do not yet have any mechanisms in place that would make it possible for them to actually manage remotely controllable installations with a capacity between 25 kW and 100 kW. This means that only a small proportion of installations with a capacity less than 100 kW can be switched off if the system frequency is at risk.

It is estimated that about half of the solar installations are controllable. This means that at the moment about 50 GW of the 100 GW or so of installed solar capacity cannot be remotely controlled by network operators. Fortunately, small installations do not all feed in their maximum amount of electricity at the same time because, for example, the solar panels are in the shade, not pointing south, dirty or damaged. It can be assumed that most of the yellow “mountain” of 39 GW shown above is electricity from small installations that cannot be remotely controlled.

Some of the fossil fuel power plants also carry on producing electricity on days like this. In this case, a distinction is made between the “minimum generation” and the “generation base”. The minimum generation is the smaller of the two; it is needed for certain system services in the electricity network and cannot be reduced. For instance, the transmission system operators are required to keep what is known as “negative balancing capacity” in reserve so that they can respond to unplanned incidents in the electricity network. Power plants have to be operating and generating electricity to be able to offer negative balancing capacity. It is not possible or allowed to do without this minimum level of generation.

By contrast, the conventional generation base refers to power plants (above all coal-fired and CHP plants) that are limited in how they can adjust the amount of electricity they produce for economic reasons, for example because they are expensive to power up or because they are contracted to deliver heat. The “self-supply” discount on network tariffs, taxes and levies also means that it can make more economic sense for industries, in particular, to produce their own electricity rather than buy it on the market even when prices are negative. It is likely that the amount of electricity these plants produce would be reduced if there was the risk of an imbalance in the system because of the likelihood of extremely low negative prices. Network operators could and would have to switch off this generation if there was the threat of a system imbalance.

In addition, biomass and hydropower plants only respond to the signals in the electricity market to a small extent. This is because financial support schemes for this type of renewable electricity generation do not include any incentives (or requirements) for responding to price signals.

On Easter Sunday, when the Central European electricity market was able to take on the surplus electricity produced in Germany, the combination of solar generation, the lack of response from biomass and hydropower and the conventional generation base meant that total feed-in from renewable and conventional sources was more than 8 GW higher than the amount of electricity actually consumed from Germany’s network. The electricity that was surplus to Germany’s demand was sold and exported to neighbouring countries. However, as solar capacity in neighbouring countries grows, it is likely to become more and more difficult for Germany to sell a lot of electricity to its neighbours at sunny times. Up until now, network operators have been able to manage critical situations without having to switch off plant capacity because they have been able to export the surplus electricity.

A high level of solar feed-in like this has a direct effect on prices. Between 10am and 5pm, the wholesale electricity price fell to zero and below – at times down to minus 50 euros per megawatt hour (€/MWh). Customers were paid to use electricity.

While conventional generation base plants feel the economic effects of their limited flexibility when prices are negative, operators of small solar installations do not feel these signals and can carry on feeding electricity into the network without any economic consequences. One important reason for this is the current financial support scheme for feed-in: payments are still made for solar feed-in even if the market is saturated. Because payments are not linked to the market prices for electricity, there is no economic incentive for operators of small solar installations to reduce their feed-in when prices are negative. This leads in the worst case to an imbalance between supply and demand – with significant effects on network stability and the electricity market.

If the amount of electricity fed in from non-controllable solar installations continues to increase, it cannot be ruled out completely that the network operators will disconnect certain parts of their networks as a last resort to keep the system stable overall. This will of course only affect parts of networks in rural areas with a significant surplus of solar feed-in. The effect in these areas would be like a short power cut, similar to when lightning has struck or a power cable has been damaged.

Market players are becoming more aware in view of the weekends and public holidays in the summer months. Sunny weather especially on public holidays and on days between public holidays and weekends can lead to a particularly high level of solar feed-in since demand for electricity on days like those is usually much lower than on normal working days.

Possible solutions

The transmission system operators think it is very unlikely that they will have to take any severe intervention measures in 2025 to safeguard secure and reliable operation of the transmission network. At the same time, market players are well prepared and prompt action is necessary to manage the problem given a further increase in solar capacity.

Germany’s policymakers have introduced key measures – in particular in the “Solar Peak Act”, which came into effect in February 2025 – to deal with the problem of congestion and limited network capacity as well as the problem of the increasing risks to system stability.

Solutions for congestion

The most important way to reduce congestion is to expand the transmission and distribution networks as quickly as possible. Statutory arrangements were put in place in summer 2024 to give priority to network expansion: it is now classed as being “in the overriding public interest” and therefore has priority over other planning.

In addition, the new Solar Peak Act requires network operators with insufficient network capacity to offer special network connection agreements in order to ensure that new renewable installations use the available network capacity economically.
One important contribution towards solving the problem of congestion is the statutory requirement for network and installation operators to improve the practical options for controlling small installations as well. Installation operators who are required to install a remote control function can be penalised if they do not comply. Network operators must report to the Bundesnetzagentur once a year on progress in the remote control functionality of installations connected to their networks.

Solutions for system stability

The Solar Peak Act includes increased incentives for installation operators to respond to signals from the market. Operators of new, small solar installations may only feed in 60% of their nominal capacity if they do not sell their electricity themselves. At the same time, operators selling their electricity themselves are eligible to a higher level of financial support. No financial support will be paid in hours when electricity prices are negative.

Direct selling via service providers creates economic incentives for operators of small, private solar installations not to feed in as much electricity as they like but to produce and feed in electricity depending on the current price for electricity. Together with a “dynamic” electricity supply contract, “prosumer households” will be able to financially optimise both the electricity they consume and the electricity they feed into the network. This is referred to as “market-based operation”. With a combination of an electric vehicle, a storage battery, a solar installation and maybe even a heat pump, consumers can earn extra income using an effective energy management system that can cover the costs of the control technology needed and save several hundred euros a year.

A large number of complex steps in the procedure will have to be standardised and automated before market-based operation is ready for the mass market. The sector is working hard to achieve this, since market-based operation is the only way to economically integrate small solar installations into the electricity market properly. Market-based operation will enable solar capacity to continue to grow without any restrictions and without any risks for security of supply.

The Bundesnetzagentur is developing arrangements aimed at integrating storage batteries into market-based operation on a large scale and minimising the metering work involved. Each and every solution depends on installations being controllable. This also applies to network operators being able to control installations, which is necessary above all for direct selling.

Furthermore, the Bundesnetzagentur has introduced a requirement for distribution system operators to offer variable network tariffs for “controllable consumers” as of 1 April 2025. The aim of these time of use tariffs is to encourage consumers to adjust their consumption more to actual conditions in the electricity network. Consumers charging their electric vehicles when demand in the network is low will pay lower network tariffs, while higher network tariffs will be payable when demand is higher. Network operators will be able to create financial incentives to encourage consumers to consciously move energy-intensive processes, such as charging electric vehicles, to times when feed-in is high. This will relieve the electricity network, reduce solar peaks and support the integration of renewable energy.