EEG 2027 & Grid Package: Cabinet Decision on the Refinancing Contribution (CfD) at a Glance

Brief overview

Federal Cabinet and BMWE have on July 29, 2026 their government drafts for EEG Amendment 2027 and Grid Package approved. This marks the first time there is a version that goes beyond the ministerial draft – with rearranged paragraphs, specified values, and a completely new regulatory area: the grid package.

• The Refinancing contribution (now Section 21d EEG 2027, formerly § 20a EEG draft) remains the central CfD mechanism for new installations with an installed capacity of 100 kW and above.
• For systems between 100 kW and the respective tender threshold, a uniform applicable value of 6.2 ct/kWh.
• New compared to the previous state of discussion: The network package leads capacity-constrained grid areas with a Redispatch reservation for utility-scale solar PV and onshore wind.
• Scheduled entry into force: January 1, 2027, subject to parliamentary deliberations in the Bundestag starting in September 2026 and EU state aid approval.

From the draft bill to the cabinet decision: What has changed?

Anyone who has already looked into the topic may be familiar with our previous posts: the Classification of EU requirements from Art. 19d EBM-VO from October 2023, the Interim report on German implementation as well as our Analysis of the draft bill from May 2026. With the cabinet decision of July 29, 2026, several paragraphs in the EEG 2027 were postponed. Anyone still relying on the standards cited there is in some cases citing incorrectly.

An overview of the most important shifts:

In addition to the renumbering, the cabinet decision introduces two substantive innovations that were not yet reflected in our previous articles: one specific applicable value of 6.2 ct/kWh for installations below the tendering threshold and the integration with Network packet, which introduces capacity-limited grid areas and a redispatch reservation. We explain both below.

The legal framework itself has not changed: The EU electricity market reform obliges Germany via Article 19d of the EU Electricity Market Regulation (EMR) at the latest from July 17, 2027 on two-sided contracts for difference for direct price support schemes such as the EEG. In addition, the EU state aid approval for the EEG 2023 expires at the December 31, 2026 from – two independent deadlines that explain the time pressure on the German legislator.

How does the refinancing contribution work?

A contract for difference couples the remuneration to a long-term fixed reference price – under the EEG: the applicable value – instead of the fluctuating stock exchange electricity price. The principle is symmetrical: If the market price is lower, the operator receives the difference; if it is higher, the difference flows back.

Previously – floating market premium (one-sided CfD): If the market value falls below the calculated value, the market premium makes up the difference. If it exceeds it, the operator keeps the full additional revenues—a „one-way street” in favor of the operator.

New – Refinancing contribution as a two-sided CfD (§ 21d EEG 2027): The market premium remains in place during low-price years. In high-price years, however, the operator must pay back the difference – a true clawback makes the model a „two-way street.”.

The formula: Refinancing contribution = technology-specific annual market value (day-ahead-based) − strike price. The calculation is production-dependent per kilowatt-hour fed into the grid – including temporarily stored amounts of electricity – and is billed annually in retrospect via the grid operator.

Calculation example (Assumption: applicable value = 6.2 ct/kWh):

For 15-minute intervals with low spot prices during periods of low market revenues, an additional rule also applies to solar systems minimum revenue of 0.5 ct/kWh. No payment obligation arises in the event of negative electricity prices.

Right to vote & exit

Operators must within six months of commissioning explain whether they are claiming the financial support (Section 20 (2) EEG 2027). A one-time, irrevocable waiver is possible in accordance with § 21e EEG 2027 – effective from January 1 of the following year, then the market premium and refinancing contribution cease to apply at the same time. The option remains open until the end of the 10th calendar year following commissioning. Important: A simple switch to other direct marketing (§ 21b EEG 2027) terminates the payment obligation. not – this regulatory gap in the original concept was closed.

How is the value to be determined set?

The applicable value is not a flat rate – it depends on the system size and is determined in two different ways:

For plants between 100 kW and the respective tender threshold does a uniform value to be applied apply of 6.2 ct/kWh (without public tender).

For plants above the call for tenders threshold does the value to be applied correspond to the individual premium value (bid value) from the respective EEG tender – determined competitively in the pay-as-bid procedure, capped by a statutory maximum value. The tender threshold is in two segments shared:

In both cases, the value to be applied fixed once upon award or commissioning and remains constant over the entire funding period – without inflation adjustment. It is thus precisely the threshold that determines payout and skimming: annual market value below it → market premium; annual market value above it → refinancing contribution.

degressive rate regulation

Starting August 1, 2027, the applicable value will decrease by 1 % every six months compared to the value in effect during the preceding period. This may be relevant when selecting the bid or commissioning date.

One point of criticism remains: In its guidelines of December 19, 2025, the European Commission recommends non-production-dependent CfDs to avoid perverse incentives („produce and forget”). The German draft remains production-dependent – a potential point for improvement in the further legislative process.

Who is affected – and who is not?

Affected are new installations with an installed capacity of 100 kW or more that feed power into the grid and wish to claim EEG funding. Without a reference to funding, no payment obligation arises. Credited against this is only the electricity that is generated and fed into the public grid. Biomass plants are excluded – with a counter-exception for sewage and landfill gas, which remain subject to skimming. Banks and project financiers are also indirectly affected (new risk modeling in project calculation), as are direct marketers and grid operators who handle the processing.

Not affected are PV self-consumption and Direct delivery without grid transmission, renewable energy systems under 100 kW as well as non-subsidized renewable energy systems and Standalone storage, as these are not generators under the EEG.

grandfathering rights applies in three scenarios: Premiums resulting from a bidding date in 2026 apply regardless of the subsequent commissioning of the plant. PV plants commissioned before 2027 retain their existing 20-year support under the old law. In the case of repowering before 2027, the existing support termination after 20 years applies initially; the CfD model will only take effect from 2027.

New: The grid package introduces capacity-limited grid areas

On the same day – July 29, 2026, the Federal Cabinet adopted parts of the Network packets passed, which are closely intertwined in terms of content with the CfD model.

Central new element: capacity-constrained grid areas.

Distribution system operators can designate grid areas if in the previous year more than 5 % the amount of energy generated by renewable energy plants was curtailed via redispatch. This represents a reduction from the threshold of 3 % originally discussed. The reporting applies to up to 6 years (originally, 10 years were planned).

In these areas, a takes hold Redispatch reservationNew renewable energy plants will only receive a grid connection if operators waive portions of the financial compensation for redispatch curtailment (Section 14 (1d) EnWG-E in conjunction with Section 8 (4) EEG-E and Section 13a (6) EnWG-E). Important for practice:

• The deportation takes place technology-specific and only applies to solar systems of the first segment (ground-mounted PV) as well as onshore wind energy.
• The waiver without compensation is capped: maximum 20 % of the electricity generated by the PV system in a calendar year, for wind the limit is 18 % (Section 8 (4) sentence 3 EEG-E).
• Systems from the Segment (Commercial roofs and noise barriers) are initially subject to the redispatch reservation not recorded. Battery storage systems are excluded in any case, as they are not considered generation facilities under the EEG.

For Storage Projects This results in a structural opportunity: The co-location privilege in the grid package strengthens the combination of PV or wind with battery storage as a solution to grid bottlenecks and redispatch risks—provided that the MiSpeL regulation, with its new demarcation option, takes effect on January 1, 2027. We have provided details on the current distinction between subsidized feed-in and grid electricity arbitrage via the same storage system in our MiSpeL contribution In summary.

Case Study: A Comparison of 500-kWp and 1,000-kWp Rooftop Solar Systems

What are the specific effects of the new model? The following sample calculation compares a 500-kWp and a 1,000-kWp rooftop system with an 80 % self-consumption rate—in each case under the old EEG (commissioned in 2026), under the new CfD model in a low-price and a high-price year, as well as with a battery storage system that increases the self-consumption share by 10 percentage points to 90 %.

Assumptions: Specific annual yield: 1,050 kWh/kWp; avoided electricity purchase price: 20 ct/kWh.

500-kWp rooftop system

1,000-kWp rooftop system

The pattern is the same for both system sizes: The new CfD model, on its own, significantly reduces revenue from feed-in—by about 1,900 euros annually for the 500-kWp system and by about 9,000 euros for the 1,000-kWp system. As soon as a Battery storage I work with narcotics however, the share of self-consumption by only increases by 10 percentage points, this effect is reversed: Profitability is increasing compared to the pure CfD scenario, by approximately 7,250 euros (500 kWp) or 14,500 euros (1,000 kWp)—and is thus higher than the baseline under the old law in both cases.

What does this mean for plant operators?

For new PV systems of 100 kW and above, the grid operator acceptance will no longer apply starting January 1, 2027, as the fixed feed-in tariff for new installations is being abolished. Direct marketing via CfD will thus become the standard.

For commercial PV operators (C&I) This creates a de facto revenue cap during periods of high prices. As a result, Contracting models—which focus on self-consumption and grid fee optimization—become more attractive than pure full-feed-in models, because any electricity that is not fed into the grid cannot be subject to the refinancing contribution. Self-consumption remains completely outside the scope of the refinancing contribution.

For Storage Projects does the co-location privilege in the grid package strengthen the combination of PV or wind and battery storage as a structural response to grid bottlenecks and redispatch risks.

For Investors and Lenders Early dual structuring of contracts (subsidies versus PPA) is recommended, as switching options are limited. The refinancing contribution becomes a central assumption in project financial modeling – worst-case modeling is necessary.

Frequently asked questions about the refinancing contribution in the EEG 2027

Sources

This article is based on the cabinet decision on the 2027 Renewable Energy Sources Act (EEG) and the grid package (July 29, 2026), the associated draft bills by the Federal Ministry for Economic Affairs and Energy (BMWE), as well as information from the Federal Network Agency and the Foundation for Environmental Energy Law. A more in-depth classification of the EU legal foundations can be found in our Contribution on EU Contracts for Difference as well as in Interim report on the draft bill. The EEG 2027 is still in the legislative process – all information refers to the current status and is subject to change. This article does not constitute legal advice.