Feed-in tariff vs. direct marketing

The feed-in tariff is the traditional model that has been the foundation for supporting solar power roll-out in Germany for years. Operators of photovoltaic systems receive a guaranteed payment for every kilowatt-hour they feed into the grid, with the rate fixed for an extended period (currently 8.03 cents/kWh as of November 2024). While this might initially seem like a secure and predictable source of income, the reality is more nuanced.

In recent years, feed-in tariffs have been drastically reduced and the political framework is constantly changing. And while the feed-in tariff offers some security, many operators miss the opportunity to market their electricity directly at better conditions. In addition, systems >100 kWp are no longer allowed to participate in the feed-in tariff, but must instead market their electricity directly.

This is where direct marketing comes into play - the model for all those who do not want to settle for stagnating feed-in tariffs. Those who do not simply feed their solar power into the grid, but actively market it, can achieve significantly higher revenues. In this system, operators sell their electricity directly to electricity traders or via the electricity exchange - and in real time, often at market prices that are well above the feed-in tariff. In direct marketing, a distinction is made between the market premium model and other direct marketing.

How does the market premium model work?

The market premium model is most similar to the feed-in tariff. The EEG specifies the so-called “values to be applied” for different system sizes. Depending on the “values to be applied” and the average monthly market prices on the electricity exchange, the market premium is calculated and paid out to the plant operator. The market premium is the difference between the “value to be applied” and the market price. The “values to be applied” are guaranteed, so to speak, in return for an obligation to market PV systems larger than 100 kWp directly.

However, rooftop PV systems larger than 750 kWp are required to participate in tenders issued by the Federal Network Agency. The “value to be applied” for these systems results from the awards granted for the bids submitted.

Other direct marketing

There is also other direct marketing, where system operators are not entitled to support or the market premium. This is either because they do not participate in the tenders, or because they exceed the tender volumes, or because they actively decide against it. This is because in other direct marketing there is the additional option of marketing the electricity's green electricity certificates separately in the form of guarantees of origin.

Sounds like a golden future, doesn't it? But the path to direct marketing is not without its hurdles. It requires know-how, flexibility and the ability to understand and use market prices. Operators have to adjust to fluctuating prices and are no longer protected from the risks of the market. For smaller solar installations in particular, getting started with direct marketing can be a major challenge.

At minimum energy, we try to provide precisely this scientific and fact-based decision-making basis so that complex energy systems can be designed and planned in a cost-optimized manner.