In a controversial move, the German government has announced plans to curtail financial support for renewable energy projects starting in 2025. The decision comes as the cost of subsidizing clean energy production spirals out of control, exceeding allocated funds by a staggering 10.6 billion euros to date.

While renewable energy is a cornerstone of Germany’s ambitious climate strategy, aiming for 80% of electricity generation from renewables by 2030, the government argues that the current support system is unsustainable. Under the proposed changes outlined in the draft Budget Law for 2025, subsidies to renewable energy producers will be phased out when electricity prices dip below zero, a scenario frequently observed during periods of peak wind and solar energy generation.

The government maintains that this reform is essential to rein in costs and prevent taxpayer money from being wasted on an inefficient system. Critics, however, fear that scaling back support could jeopardize Germany’s green transition and slow down the adoption of renewable energy. This debate unfolds against a backdrop of skyrocketing costs, with projections indicating that Germany’s renewable energy subsidies will balloon to $21 billion this year, significantly surpassing available resources.