On 29 July 2026, the German federal cabinet adopted the EEG amendment and the grid connection package. We had already assessed the ministry draft of 17 July in our article “Final EEG 2027 draft and agrivoltaics”. The cabinet decision confirms the direction described there, but the grid connection package adds an element that agrivoltaic developers should factor into site selection from now on: location-based steering in grid-constrained “hot-spot” regions. Here we assess what has become more concrete since 17 July and what agrivoltaic projects now need to consider.
Key points at a glance
- Cabinet decision on 29 July 2026: the bills now go to the Bundestag and Bundesrat. Planned entry into force remains 1 January 2027.
- The focus on ground-mounted solar is confirmed at cabinet level: small rooftop systems below 25 kW lose permanent support for new installations, while existing installations remain protected. Ground-mounted systems, and with them agrivoltaics, move further into the focus of support policy.
- New: location-based steering in grid hot spots. In regions that foreseeably cannot absorb additional wind or solar feed-in, compensation for curtailment no longer applies, capped at 20 % of annual generation (18 % in wind priority areas) and limited to 6 years.
- Grid capacity will in future be sized on typical feed-in profiles instead of feed-in peaks, which saves grid expansion and is intended to speed up connection procedures.
- Grid connection procedures will be accelerated; grid operators may prioritise connection requests and reserve capacity.
- The CfD mechanism remains the support instrument, but excess profits in high-price phases are clawed back and flow back into support costs.
- Confirmed in the final bill text: applicable value of 6.2 ct/kWh (Section 48(1)), elevation bonus of +0.5 ct/kWh for category I and category II alike (Section 38a and Section 48(1b)), maximum value in the first segment of 5.9 ct/kWh (Section 37b), tender volume of 14,000 MW per year, deletion of the special segment under Section 37d. For category I systems (highly elevated), the bonus is no higher than for category II; more on this below.
From ministry draft to cabinet decision: what has shifted?
The ministry draft of 17 July was the technical basis that associations could comment on in the parallel consultation. The cabinet decision of 29 July is the next formal step: the federal government has agreed on a bill that now goes to the Bundestag and Bundesrat. Federal Economics Minister Katherina Reiche describes the core as follows: in future, the expansion of renewables is to be steered systematically according to where new installations make sense for the power grid, with the aim of reducing redispatch costs, currently over 3 billion euros a year. The 80 per cent target for 2030 and the expansion paths remain in place.
For agrivoltaics this means that the basic course of the ministry draft is not reversed: abolition of the special segment for special solar installations (including agrivoltaics), agrivoltaics competing with conventional ground-mounted systems in the shared first segment, and a moderate elevation bonus (+0.5 ct/kWh). The federal government does, however, add a systemic element that feeds directly into project planning.
Confirmed: the ground-mounted focus strengthens the structural position of agrivoltaics
The cabinet press release makes the prioritisation clear: “For solar, we are focusing more strongly on ground-mounted systems.” The reasons given are the economies of scale of large installations, which rooftop solar cannot match, and the fact that small solar systems already earn good returns without support. Permanent support for new installations below 25 kW therefore ends from 2027; existing installations keep their guaranteed remuneration for their entire lifetime.
This confirms what we had already assessed in our article on 18 July: as a ground-mounted system, agrivoltaics is structurally on the side of support policy that is to be expanded, not on the side that is being scaled back. For farmers and investors, this is a political signal that large, grid-friendly ground-mounted projects with agricultural dual use are at the centre of future solar support.
What the bill text regulates for agrivoltaics
We analysed the full text of the bill on the EEG electricity sector adopted on 29 July (not just the press release). The bonus for agrivoltaic systems in category I and category II is identical in amount. Both Section 38a EEG 2027 (for systems over 1 MW that must take part in tenders) and Section 48(1b) EEG 2027 (for systems up to 1 MW that are exempt from tenders) grant the same premium of +0.5 ct/kWh, regardless of whether a system meets the category I agrivoltaics threshold of 2.10 m or the category II threshold of 0.80 m (only for exclusively vertical orientation or tracker systems). The explanatory memorandum (on Section 38a EEG 2027) justifies the uniform bonus by stating that “orientation towards the most cost-effective technology was required in order to avoid over-compensation”. The legislator thus deliberately does not reward the higher additional costs of category I substructures (supporting structure, posts, greater clearance for farm machinery) compared with category II. For the business case of highly elevated projects, this means: the bonus covers part of the additional technical effort, but the system itself has to earn the difference in actual substructure costs through efficient project design.
In total, this gives the following for category I systems:
- Exempt from tenders (≤ 1 MW): 6.2 ct/kWh + 0.5 ct/kWh bonus = 6.7 ct/kWh (Section 48(1) in conjunction with (1b)).
- Subject to tenders (> 1 MW): award value up to a maximum of 5.9 ct/kWh (maximum value under Section 37b) + 0.5 ct/kWh bonus = a maximum of 6.4 ct/kWh (Section 38a).
The proof and sanction mechanism is identical for both size classes. Section 48(5) EEG 2027 for systems exempt from tenders and Section 54(2) EEG 2027 for tendered systems over 1 MW use identical wording: if proof of agricultural use or of simultaneous crop cultivation is missing, the applicable value is reduced by 0.5 ct/kWh, no longer to zero. The reduction lapses retroactively if the proof is submitted in the following year.
Newly identified, relevant for planning agrivoltaic systems over 1 MW: Section 54(1) EEG 2027 introduces a staggered deadline that did not exist in this form in the EEG 2023: if the system is commissioned more than 18 months after public announcement of the award, the applicable value is reduced by 0.3 ct/kWh. This comes on top of the known rule that the award lapses entirely after 24 months (Section 37e).
Land parcel flexibility only within the agrivoltaics/peatland solar family. Under Section 38(1) no. 1© EEG 2027, the system must in principle be located on the land parcel named in the bid. Unlike standard ground-mounted systems, however, an award for agrivoltaics may be used flexibly between different agrivoltaic and peatland solar sites named in the bid. This flexibility only exists within the category of “special solar installations” (Section 37(1) no. 3(a) to © or (e)) and not in relation to standard ground-mounted sites.
Exempt from the minimum ecological criteria. Section 38(1) no. 4 EEG 2027 only requires compliance with the minimum ecological criteria under Section 37(1a) for land under Section 37(1) no. 1 or 2, not for agrivoltaics under no. 3. Agricultural dual use therefore continues to count as an independent and sufficient ecological justification, a point we had already made on the ministry draft and which is confirmed in the final cabinet text.
New and decisive: location-based steering in grid hot spots
The grid connection package introduces an instrument that did not appear with this sharpness in the EEG ministry draft alone: location-based steering for regions with foreseeable grid congestion. Specifically, the cabinet decision provides for the following:
- In so-called hot-spot regions, which foreseeably cannot absorb feed-in from wind or solar installations, compensation payments for curtailment will no longer apply.
- A cap limits the financial risk: a maximum of 20 % of annual generation, 18 % in wind priority areas.
- The instrument is limited to 6 years.
- Grid expansion in the affected regions continues in parallel. Location-based steering does not replace it; in the meantime it is meant to direct new capacity more strongly to where the grid can actually absorb it.
For agrivoltaic projects of 1 MW and above, which must take part in tenders anyway and, as described in the ministry draft, will in future have to bid with a binding reference to a land parcel, this has immediate consequences: the grid compatibility of a site becomes a separate assessment criterion that should be clarified before bidding, not afterwards. A land parcel that is ideal in agricultural and planning terms but lies in a grid hot-spot region now carries an additional, albeit capped, yield risk for up to six years.
At the same time, the cap of 20 % (or 18 %) of annual generation is a calculable, limited risk and not unlimited liability. That distinguishes the instrument from pure market curtailment without any floor. For project finance, this means the risk can be priced in, provided the grid situation at the site is assessed early and reliably.
Grid connection becomes faster, if the profile fits
Two further rules in the grid connection package work in the other direction, namely as accelerators:
Grid capacity based on the typical feed-in profile instead of peak load. Until now, grid capacity has often been sized for a plant’s theoretical feed-in peak, even though this peak is actually reached in only a few hours a year. In future, available grid capacity is to be measured more strongly against typical feed-in profiles. This may become relevant for agrivoltaic systems with vertical module orientation (category II under DIN SPEC 91434), whose east-west orientation typically gives a flatter feed-in profile than a classic south orientation. We are keeping an eye on this aspect as we analyse the implementing ordinances.
Prioritised and accelerated connection procedures. Grid operators are to be able to prioritise grid connection requests and reserve capacity in future. For project developers, this potentially means shorter waiting times between award and grid connection, a factor that gains weight given the tighter deadlines in the ministry draft (24 months to commissioning instead of the previous 26-month application deadline).
The CfD mechanism remains, excess profits are clawed back
The federal government is sticking with two-way contracts for difference (CfDs) as the support instrument for larger installations. What is new is that excess profits in periods of high electricity prices are clawed back and flow back into support costs. Over time this makes support systemically cheaper, without plant operators being less protected in low-price phases. Installations that can be financed entirely by the market may in future also be built outside the EEG.
Clarified by the bill text: the reference is the technology-specific annual market value, not the individual marketing revenue of the plant. Under Section 3 no. 34 EEG 2027, the “market value” is the energy-source-specific market value of electricity from renewable energies, derived from the actual annual average spot market price for the respective technology (annual market value). It is therefore a published reference value (comparable to today’s “market value solar”), not the marketing revenue actually achieved by the individual plant. The new Section 21d EEG 2027 obliges operators of installations with an installed capacity of 100 kW or more to pay a refinancing contribution to the grid operator if this annual market value exceeds the plant’s applicable value. This is symmetrical to the existing market premium, which applies when the annual market value is below it. For agrivoltaic systems over 1 MW in the CfD mechanism, this means: the clawback risk depends on the average solar market value of the year, not on how well or badly the individual plant markets its electricity. A plant with above-average marketing of its own keeps the additional revenue over the reference value.
What agrivoltaic developers should do now
Make the grid situation an early checkpoint. Before land is secured, it should be clear whether a site lies in a foreseeable grid hot-spot region. The binding land parcel reference in the bid makes a later change of site impossible anyway, so the grid check has to be brought forward rather than carried out afterwards.
Price in the risk rather than ruling it out. The capped nature of location-based steering (a maximum of 20 % or 18 % of annual generation, limited to 6 years) means that hot-spot locations are not automatically uneconomic, but they require an explicit risk calculation in project finance.
Keep following the legislative process. With the cabinet decision, parliamentary deliberation in the Bundestag and Bundesrat begins. Changes to detailed rules, for example to the specific support rates for agrivoltaics, are common and possible in this process. We will update our assessment as soon as the Bundestag deliberates on the bill.
Ylektra’s assessment
In our view, the cabinet decision confirms the structural upgrading of agrivoltaics compared with small-scale rooftop solar that was already emerging in the ministry draft. What is new and immediately relevant for project practice is location-based steering in grid hot spots: it shifts part of the site assessment from a pure land and yield logic to an explicit grid compatibility check, before a land parcel is committed in a bid. For well-prepared projects with a reliable grid assessment, the risk remains manageable and calculable. Ylektra already includes the grid situation in the site analysis of ongoing projects and will continue to analyse the parliamentary deliberations and the final version of the support rates for agrivoltaics in the coming weeks.
Frequently asked questions
Is the cabinet decision of 29 July 2026 already law? No. The cabinet decision is a federal government bill that will now be deliberated in the Bundestag and Bundesrat. Planned entry into force remains 1 January 2027; changes are possible in the parliamentary process.
Does the cabinet decision change the 1 MW tender threshold for agrivoltaics? The cabinet press release makes no separate statement on this. Under the ministry draft of 17 July, the 1 MW threshold for agrivoltaics as a ground-mounted system remains unchanged.
What does location-based steering mean in practice for an individual agrivoltaic project? If a site lies in a hot-spot region designated by the grid operator, the plant can be curtailed without compensation, capped at a maximum of 20 % (18 % in wind priority areas) of annual generation and limited to 6 years. Outside such regions, the rule does not apply.
Is there still a dedicated tender segment for agrivoltaics in the EEG 2027? No. The previous sub-segment for special solar installations under Section 37d EEG 2023, i.e. the separate support pot with its own, higher maximum value, is deleted. Agrivoltaics will in future compete with standard ground-mounted solar in the shared first segment. The definition of agrivoltaics as a “special solar installation” under Section 37(1) no. 3 EEG 2027 remains unaffected and continues to be the basis for the elevation bonus and other special rules.
How high is the bonus for agrivoltaics (category I and category II) under the EEG 2027? Highly elevated agrivoltaic systems with a clearance of at least 2.10 m receive the same bonus as vertically oriented category II systems from 0.80 m: +0.5 ct/kWh (Section 38a and Section 48(1b) EEG 2027). A higher bonus for the greater construction effort of category I is not provided for in the bill.
How is the refinancing contribution calculated under the CfD mechanism of the EEG 2027? The difference is calculated against the technology-specific annual market value (comparable to today’s “market value solar”), not against the marketing revenue achieved by the individual plant (Section 3 no. 34, Section 21d EEG 2027). Operators of installations with an installed capacity of 100 kW or more pay a refinancing contribution if the annual market value exceeds the applicable value.
What happens if an agrivoltaic system with an award is not commissioned within 18 months? Under Section 54(1) EEG 2027, the applicable value is reduced by 0.3 ct/kWh if the system is only commissioned after 18 months from public announcement of the award. After 24 months, the award lapses entirely (Section 37e EEG 2027).
What is the difference between category I and category II agrivoltaics under DIN SPEC 91434? Category I refers to highly elevated systems with horizontally oriented modules and a clearance of at least 2.10 m, under which farm machinery can pass. Category II refers to ground-level systems with exclusively vertically oriented modules and a clearance of at least 0.80 m, usually in rows between the crops. Ylektra relies on tracker systems that follow the sun. (in German) Under the EEG 2027, both agrivoltaics categories receive the same bonus of +0.5 ct/kWh.
What happens with agrivoltaic systems over 1 MW if proof of agricultural use is missing? Under Section 54(2) EEG 2027, the applicable value is reduced by 0.5 ct/kWh, in identical wording to the rule for systems below 1 MW that are exempt from tenders (Section 48(5)). The reduction lapses retroactively if the proof for the past year is submitted in the following year.
Do agrivoltaic systems have to meet the minimum ecological criteria for ground-mounted systems? No. Under Section 38(1) no. 4 EEG 2027, the minimum ecological criteria under Section 37(1a) only apply to standard land under Section 37(1) no. 1 or 2. Agrivoltaics under no. 3 is exempt; agricultural dual use counts as an independent ecological justification.
Can awards for agrivoltaic projects be sold on? Yes. The obligation under the EEG 2023 that the bidder must also be the operator of the plant at the time of commissioning (bidder-operator identity) no longer applies under the EEG 2027. This makes turnkey projects and the entry of institutional investors after the award easier.
Is the payment entitlement procedure also abolished for agrivoltaic systems over 1 MW? Yes. The previous payment entitlement procedure under Section 38a EEG 2023, with its 26-month application deadline, is abolished entirely. It is replaced by the simpler rule in Section 37e EEG 2027: the award lapses if the plant is not at least partially commissioned within 24 months.
When is the EEG 2027 to enter into force? The cabinet decision of 29 July 2026 now goes to the Bundestag and Bundesrat for deliberation. Planned entry into force remains 1 January 2027. Changes to detailed rules are possible in the parliamentary process.
About Ylektra
Ylektra specialises in the development and realisation of agrivoltaic projects with battery storage across Germany. Together with farms, municipalities and investors, we realise dual-use concepts that combine agriculture and the energy transition.
Legal notice: This article assesses the cabinet decision on the EEG amendment and the grid connection package of 29 July 2026, based on the press release of the Federal Ministry for Economic Affairs and Energy and a full-text analysis of the bill on the EEG electricity sector (as adopted by the cabinet). The sections cited in the text (including Sections 37, 37b, 38, 38a, 48 and 54 EEG 2027) refer to this version. It does not replace individual legal advice. The rules on location-based steering in grid hot spots come from the separate grid connection package, whose full text was not available to us for this article; its details are therefore assessed on the basis of the press release. Changes in the further legislative process (Bundestag, Bundesrat) are likely.