The legal frameworks for decentralized energy supply concepts, Customer facilities and Tenant electricity must be newly regulated by the German federal government. The starting point is the judgment of the European Court of Justice (ECJ) of November 28, 2024 (Case C-293/23), which now has national effect due to a decision of the Federal Court of Justice (BGH) of May 13, 2025 (File No. EnVR 83/20). The so-called. Customer Facility Privilege according to § 3 No. 24a EnWG, which has so far been a cornerstone for tenant electricity projects, neighborhood solutions, and industrial self-supply networks, largely disappeared.
ECJ ruling: no special regulations for customer systems & tenant electricity models
The CJEU clarified that national special regulations how the German customer installation privilege is incompatible with the EU internal electricity market directive (Directive 2019/944). In particular, it is impermissible to exclude energy infrastructures from the Union-law defined concept of a distribution network based on national criteria. Thus, the hitherto German practice contradicts the European legal framework.
According to the ECJ, all lines through which Electricity to end consumers will be delivered, fundamentally as distribution networks – regardless of their size, technical structure, or the fact that they only supply a single building or a defined area. National special categories, such as the so-called "Kundenanlage" (customer installation), may therefore not use additional characteristics like the number of final consumers, the electricity flow, or the spatial extent to exempt certain installations from regulation.
In practice this means: Operator such power supply systems are to be considered a distribution network operator. From now on, they will be subject to the same regulatory requirements. These include, among others, the obligation for ownership and operational unbundling, the regulation of network charges, and comprehensive access and transparency obligations. Exemptions from these obligations are only possible in cases explicitly provided for in Union law – for example, for closed distribution networks or citizen energy companies.
Federal Court of Justice Decision: National Implementation of ECJ Requirements
The Federal Court of Justice has now consistently taken up, confirmed, and applied the case law of the Court of Justice of the European Union to a specific tenant electricity project. In doing so, the court clarified that customer installations and tenant electricity may only be interpreted in accordance with the EU Electricity Internal Market Directive (2019/944). In practice, this means: A customer installation only exists if there is no charge for electricity supplied to third parties.
In the case under appeal, a project developer planned to supply 250 apartments via its own private pipeline network. Since electricity was to be supplied to multiple end consumers for a fee, the BGH classified the network as Regulated distribution network. The previous special treatment of such structures through the customer plant privilege has thus been effectively abolished.
The legal consequence: operators of corresponding facilities are now subject to complete energy industry law. This includes, for example, the obligations to pay Network charges, for the takeover of Balance sheet responsibility or to establish a proper Metering operations. Tenant electricity models, such as those with PV systems, neighborhood solutions with combined heat and power or renewable energies for commercial area supply – for example in industrial parks – as well as communal supply models in larger buildings are particularly affected.
Impacts for Operators of Customer Facilities & Tenant Electricity Models
Many customer-owned and tenant electricity projects have so far been based on the privileges under Section 3 No. 24a of the German Energy Industry Act (EnWG). This provided them with significant economic advantages, as neither grid fees, levies, nor other regulatory obligations were incurred. However, with the reclassification of such plants as distribution networks subject to regulation, these privileges are being eliminated, fundamentally calling into question the economic viability of numerous projects.
The newly emerged is particularly problematic Legal uncertainty for existing facilities. Since the classification as a customer installation has so far usually been carried out without official inspection, it now threatens subsequent regulatory measures – such as claims for repayment, restructurings, or the obligation to re-register as a closed distribution network. This affects not only new but also long-established supply structures in residential areas or industrial sites.
Even existing funding mechanisms like the Tenant electricity supplement are under pressure according to § 21 Paragraph 3 EEG. This support requires that the electricity is not routed through a general supply grid. However, if a previously privileged customer system is classified as a regular distribution network, this condition is no longer met – and the Grant claim expires. Numerous projects would no longer be economically viable as a result.
Urgency for customer systems & tenant electricity is increasing
Operators and developers of customer facilities and tenant power projects are significantly unsettled by the rulings and are calling for new regulations from the German legislature. Currently, there is a threat of Devaluation of existing projects and Investments into new projects stock. Companies now face the challenge of reassessing, adapting, or, if necessary, restructuring their energy supply structures as closed distribution networks in accordance with regulations. Without new regulations, they will face new obligations – such as accounting unbundling, the collection and payment of grid fees and surcharges (like the KWKG, Offshore, or § 19 StromNEV surcharges), granting grid access to third parties, and comprehensive reporting and proof of compliance obligations to regulatory authorities. Furthermore, there continue to be problems with the generation of Origin certificates: Bureaucracy is slowing down green tenant electricity.
Perspectives for Operators & Impulses for Legislation
Operators and project sponsors of decentralized power supply models should now undertake a critical review of their existing facilities. This review should assess whether the technical and operational configurations of the facilities meet the ECJ's criteria for a distribution network requiring regulation. Where this is the case, existing concepts must either be adapted or replaced legally sound alternative models to be replaced. One possible approach to this lies in hybrid supply concepts, in which electricity is not supplied exclusively via an internal network, but is provided in addition to an existing basic supply tariff.
At the same time, the German federal government is called upon to adapt the network system to European requirements and, at the same time, to create practical solutions for smaller, consumer-oriented structures. At the EU level, the internal electricity market directive, for example, offers scope, such as by recognizing closed distribution networks and citizen energy communities, which can be exempted from regulatory requirements under certain conditions. At the national level, so-called area networks could offer solutions. This would create a legally secure and economically viable basis for many decentralized supply models.
The Renewable Energy Sources Act (EEG) would also need to be adjusted: To continue to enable the tenant electricity subsidy, models with internal electricity distribution should remain eligible for funding – provided that transparency, consumer protection, and non-discrimination are guaranteed. Only through such a interplay of technical, regulatory, and political measures can decentralized energy concepts be successfully implemented in the future.
Realignment of customer facilities & tenant electricity urgently required
The ECJ ruling and the subsequent BGH decision bring clarity – and at the same time great uncertainty. The previous regulation in Germany regarding customer facilities and tenant electricity is therefore contrary to Union law. Now it is up to the legislator to create practical and Union law-compliant framework conditions quickly, so as not to slow down the energy transition in the commercial and urban sectors. Without legally sound transitional provisions and a swift adaptation of energy law, there is a threat of investment backlogs, project cancellations, and a setback in the decentralized energy transition.