In Germany, the gold rush mentality surrounding solar and wind farms has been over since 2025. Falling electricity prices are squeezing revenues, while interest rates and construction costs are rising. At the same time, long grid connection waiting times are slowing projects down, causing budgets and timelines to shift. Furthermore, a draft amendment to the Energy Industry Act (EnWG) is causing concern because new installations would no longer receive compensation for curtailment due to grid overload, potentially turning them into loss-making ventures. (handelsblatt: 20.02.26)
Gold rush ends in cost shock – solar parks are barely profitable anymore
The industry has just emerged from years of high profits, but the calculations are now rapidly changing. A few years ago, the LCOE (Levelized Cost of Electricity) – the total electricity generation costs of a plant over its lifetime – was between 3.5 and 4 cents per kilowatt-hour. Developers are currently reporting costs of 5 cents and more, while revenues are not keeping pace. The feed-in tariff for large photovoltaic parks was 5.23 cents in 2025, and according to Enervis, direct power purchase agreements are sometimes significantly lower. This means that new investments are quickly becoming a losing proposition.
This also affects financing, as banks are more cautious in their valuations. Fabian Schlüter of Commerzbank says: “18 months ago, 80 percent debt financing was still possible.” Project developers are now reporting significantly lower rates, which is why they have to contribute more equity. At the same time, investors are more hesitant, while projects are put on hold.
Layoffs and location decisions – projects are becoming more selective
The consequences are evident in personnel across the entire market. André Steinau of GP Joule from North Frisia, a solar park developer, says: “Many projects are being suspended or cannot be implemented at all.” GP Joule laid off 140 employees last year, while new projects are stalling. This is increasing the pressure on smaller developers particularly quickly, while at the same time the number of active providers is shrinking.
RWE is also reacting, even though the company has several business segments. According to Handelsblatt, RWE closed two of its nine development offices in Germany and is trying to sell off projects. However, RWE explains that it consolidated offices for “organizational and efficiency reasons.” At the end of January, RWE also sold its Swedish renewables division, with a 1.8 gigawatt pipeline and eleven existing wind farms, to the Norwegian company Aneo.
The wind energy sector is also experiencing this trend, albeit to varying degrees. PNE, a wind farm developer from Cuxhaven, issued a profit warning. CEO Heiko Wuttke stated, “Consolidation is coming.” PNE now expects profits of only €45 to €60 million, down from €70 to €110 million, due to project write-downs.
Abo Energy Fights for Survival: Creditor Vote and Energy Industry Act Dispute
The situation is becoming increasingly critical for Abo Energy, which is why the beginning of March is coming into focus. Abo Energy is a German project developer of wind and solar farms that has been active for around 30 years. In November, the company reported a loss of €95 million for 2025, but in mid-January, the next forecast was revised to a loss of €170 million. The share price fell by more than 88 percent in just three months, and sources within the company say: “We underestimated the speed and extent of the market changes.”
On March 9, thousands of creditors are scheduled to vote in Wiesbaden on changes to bonds totaling over €120 million. Because the minimum investment was only €1,000, the crisis affects many private investors. Abo Energy wants to suspend the negative pledge in order to be able to offer security to new lenders. At the same time, the company is trying to sell projects more frequently, but their value is lower than before.
For the industry, the draft amendment to the Energy Industry Act (EnWG) acts as an additional risk driver because it makes revenues even more uncertain. It includes a “redispatch reservation,” and compensation for new installations is to be eliminated in the event of curtailment. Redispatch means interventions in case of grid bottlenecks, because wind power from the north cannot reach the south, while grid expansion lags behind. RWE CEO Markus Krebber calls the draft “absurd” and said at the E-World trade fair in Essen that faster grid expansion and digitalization are the solution. He also demands: “If the redispatch costs are to be covered, then the grid operators must bear them,” and the former gold rush mentality within the industry is definitively considered a thing of the past.