More than a third of Germany’s photovoltaic (PV) electricity is generated by small rooftop systems of up to 30 kWp. According to a study by the Fraunhofer Institute for Solar Energy Systems (ISE), commissioned by EWS Elektrizitätswerke Schönau eG, the planned government phase-out of feed-in tariffs and the mandatory shift to direct electricity marketing for this segment could significantly reduce private investments in rooftop PV systems—unless the processes for direct marketing are substantially simplified.

Small rooftop PV systems of up to 30 kilowatts currently represent a significant share of Germany’s solar electricity production. “Our calculations show that direct marketing of electricity from small rooftop PV systems up to 30 kWp would currently require an approximately 15% higher self-consumption rate to achieve the same economic profitability as with feed-in tariffs,” says Dr. Verena Fluri, project director and co-author of the study at Fraunhofer ISE in Freiburg. “As a result, systems are likely to be smaller, and rooftop surfaces would not be fully utilized.”

Direct marketing currently imposes additional costs for operators compared with feed-in tariffs, as many processes are not yet standardized or simplified. This includes the need for faster deployment of smart meters and nationwide implementation of standardized electronic data exchange in the energy sector.

“Small rooftop systems have contributed substantially to the annual capacity growth, particularly in recent years,” emphasizes Peter Ugolini-Schmidt, spokesperson for energy policy at EWS. According to the study, new capacity for these systems peaked at eight gigawatts in 2023 and remained around five GWp in 2025. Small rooftop systems play a key role in achieving the expansion targets under the German Renewable Energy Sources Act (EEG).

The Fraunhofer ISE study examines the market development of small rooftop PV systems, their economic viability, and potential for more efficient grid integration. Expert interviews included in the study explore the economic challenges of direct marketing for these systems. Fraunhofer ISE suggests options such as a fixed tariff combined with a dynamic electricity purchase tariff or a flexible feed-in tariff to ensure economic operation while maintaining grid availability.

“Germany’s government plans to abolish the feed-in tariff for small rooftop PV systems and make direct marketing mandatory,” says Alexander Sladek, CEO of EWS Elektrizitätswerke Schönau eG. “However, before feed-in tariffs are removed, conditions must be created to allow efficient direct marketing.”

Sladek warns that a premature phase-out would directly affect small investors, including citizen-owned energy projects, by making installations unprofitable. “Above all, it would slow the energy transition because fewer and smaller plants would be built,” he adds.