Germany Phases Out Solar Subsidies and Focuses on Domestic Gas Extraction

German energy policy is undergoing a drastic transformation under Chancellor Friedrich Merz, sparking widespread controversy both within the governing coalition and among experts. Economy Minister Katherina Reiche (CDU) announced the suspension of subsidies for small photovoltaic systems installed on private building roofs, citing falling technology prices and the need to optimize the budget. The new strategy, set to take effect in 2027, relies on market mechanisms to set prices for renewable energy, abandoning state interventionism. At the same time, Minister Reiche shocked public opinion by proposing the expansion of natural gas extraction within Germany and closer cooperation with Ukraine as a key biogas supplier, marking a departure from the previous line of completely phasing out fossil fuels. Political reactions to these proposals are sharply divided. The Social Democrats (SPD), the coalition partner of the CDU/CSU, express firm opposition to the sudden phasing out of support for solar energy, calling these plans "unacceptable." SPD parliamentary group leader Matthias Miersch announced he would not support any regulations that would burden tenants with the costs of modernizing heating systems. The dispute concerns a new heating technology law intended to replace controversial regulations introduced by the previous cabinet. Miersch makes tenant protection a *sine qua non* condition for any agreement, fearing that a lack of protective mechanisms will lead to drastic rent increases. Since 2022, following Russia's aggression against Ukraine, Germany has undergone the deepest revision of its energy policy in history, abandoning Russian raw materials and building liquefied natural gas (LNG) terminals at a record pace.The situation is further complicated by warnings from experts and local authorities. Monika Schnitzer, chairwoman of the German Council of Economic Experts, described the government's new plans as a "cost trap" in the long term. In her view, the lack of planning stability undermines the confidence of investors and citizens. Meanwhile, cities from the former GDR are warning of a multi-billion euro funding gap in implementing local heating transformation plans. Local officials point out that without government support, East German agglomerations will not be able to bear the costs of replacing infrastructure, further deepening social disparities between the east and west of the country. The reduction of solar subsidies, although economically justified by the ministry, hits small investors the hardest, which for many observers is a signal of an ideological retreat from climate protection priorities in favor of short-term savings. „Wirtschaftsministerin Reiche fordert Erkundung deutscher Gasvorkommen und setzt auf Ukraine als Biogas-Lieferant” (Economy Minister Reiche calls for exploration of German gas deposits and relies on Ukraine as a biogas supplier) — Economy Minister Katherina Reiche An intense debate is ongoing in the media over the ethical and economic dimension of the reform. While conservative circles praise the return to pragmatism and departure from "climate dictates," progressive circles warn of squandering previous achievements in green energy. The photovoltaic industry warns that the sudden cut in support will lead to a wave of bankruptcies among local installers and slow down the transformation in the housing sector. This situation presents Merz's government with a major challenge: how to reconcile budgetary discipline with the necessity of modernizing the country, without causing a split in the coalition with the SPD and a rebellion by municipalities.

Perspektywy mediów: Liberal media emphasize the threat to climate goals and social costs for tenants. Conservative press highlights the need for market correction of technology prices and national energy security.