Reflections on whether ‘Energy Sharing’ and cooperative institutional structures appear poised to deliver renewably-generated electricity more affordably in Germany

Mallory James & Sven Karol

Did you know that Germany’s prices for electricity are higher than those of any other country in the Group of 20 (G20)? Indeed, with a cost of 35.6 cents per kilowatt hour, Germany’s electricity prices soar above the average cost of 16.3 cents per kilowatt hour across the twenty major economies comprising two-thirds of the world’s population [1,2]. One month ago, this price premium was revealed by the comparison portal Verivox, which identified German electricity as more expensive than that of Italy, the UK, Australia, South Africa, France, Japan or the USA, but less expensive than that of three small economies outside of the G20: Ireland, Bermuda, and Belgium [3]. Observers commenting on Germany’s high electricity costs attribute it to taxes, levies, and grid charges, which make up approximately 50% of the final price [1,11].

However, these high prices co-exist with another happier trend: increasing production and use of renewable electricity. Amidst targeted support policies and geopolitical pressure upon fossil energy availability, Germany has seen an eightfold increase in renewably-generated electricity from 2000 to 2024 [4]. The increase in distributed renewable energy sources (DERs) such as wind turbines and solar parks not only raises new technical and political needs for the grid, but also opens a zone for experimentation and open-endedness regarding whether and how the grid integration of renewable energy sources will be institutionalized in laws and practices. 

Within this emergent age of solar and wind power, what strategies can Germany’s residents take to ease the pain of costly electricity bills? Are there pathways for affordable electricity from the sun or wind, other than the expensive, complex, and frequently inaccessible pathway of owning an electricity generation and storage system personally? Can Germany’s residents take any specific actions to make electricity more affordable for themselves and their communities?

Peer-to-peer electricity sales in West and Central Europe

The EU has wished to make it possible for renewably-generated electricity to be bought, sold, and traded by people or institutional bodies who are not full-scale electricity suppliers with the corresponding obligations to fully and reliably meet a high threshold of electricity demand. Towards this end, the EU has written an Electricity Market Directive (EMD) in 2019, and amended it in 2024, that active consumers must be allowed to share renewable electrical energy with each other [5]. As defined by the Alliance for Citizen Energy (Bündnis Bürgerenergie e.V.) in Germany, the concept of energy sharing should be understood as using the electricity from wind or solar installations communally, even by delivering it over the public grid [15]. 

The text of the directive—specifically its preamble item #22—sets out a vision for success and a theory of the social changes that might emerge from this socio-technical practice: “Energy sharing can create resilience to the effects of high and volatile wholesale market prices on consumers’ energy bills, empowers a wider group of consumers that do not otherwise have the option of becoming an active customer due to financial or spatial constraints, such as vulnerable customers and customers affected by energy poverty, and leads to increased uptake of renewable energy by mobilising additional private capital investment and diversifying remuneration pathways. With the integration of appropriate price signals and storage facilities, electricity sharing can contribute to laying the foundation to help tap into the flexibility potential of smaller consumers.” [5] Other commentators echo and extend these hopes: perhaps energy sharing can contribute to renewable energy expansion by reducing the costs that market participants might otherwise pay, and perhaps it can increase a sense of participation and ownership in the Energiewende [14]. Perhaps it can reduce technical needs to use long-distance transmission lines to meet electricity demands [8,9].

Figure 1: "Socialized Energy (AKA Smart Grid)": Here, creator Zachary Veach visualizes how sets of buildings, each with the capacity to generate their own electricity, can be connected in multiple overlapping networks transmitting both electricity and data (e.g., about current capacities and production status) to one another. CC BY-NC-SA 2.0 license (creator: Zachary Veach). 

The EU directive cannot be carried out directly, but instead must be made concrete and operable within specific laws tailored to the national context of different EU countries [16]. Subsequently, EU countries have made laws putting nationally-specific conditions in place. Hence, energy sharing has been legally permissible in Italy since 2020, and in Austria, Portugal, and Spain since 2021 [6]. Germany’s respective law, namely § 42c of the German Energy Industry Act (EnWG), came into effect on 1 June 2026 [7]^[1]; but whether or not it will actually reduce the price of electricity for a broad swath of the German public is a completely open question. 

Reasons for optimism include: nearby countries have set a record of success, particularly Austria. Since enabling energy sharing in 2017, Austria has created over 5,000 energy communities (Erneuerbare-Energie-Gemeinschaften), meaning: groups of at least two members included together within a legal entity that registers as an electricity market participant [22], such as a cooperative organized by a municipality [10, 14]. Austria’s “energy cooperatives” are an instance of a legal form that exists around the world and in different economic sectors [12]. As of the end of 2025, there were approximately 5,000 community generation plants (gemeinschaftliche Erzeugungsanglangen) in Austria [14]. Over 250 of Austria’s sharing projects are served by a single software company, Nobile Energy [13]. 

Comparing Germany to Austria in relation to energy sharing practices and preconditions, observers have noted that Germany has been slower to introduce a legal framework [13], and has neglected to provide the incentives such as feed-in tariffs for renewable electricity, exemptions from the electricity tax, or reduced grid charges for shared energy [16]. At a public online meeting for supporters of solar energy hosted by a German NGO in July 2026, extensive questions and answers centered upon the expected costs of electricity that could emerge: many participants contributed their individual cost calculations to the chat, expressing dismay over the expected lack of financial benefit. As mentioned above, taxes, levies, and grid charges make up approximately 50% of the final price of Germany’s electricity [1,11], and ‘shared’ electricity that is bought and sold over the public grid still requires these charges. Also, the technical and institutional struggles of planning for a sharing project could more easily appear demotivating. Furthermore, approximately 97% of Austrian electricity meters are already smart meters [17], whereas Germany had only 5.9% intelligent measuring systems (i.e., smart meter) coverage as of June 2026 [18]. Smart meters are commonly, but not always, necessary for selling electrical energy: to use the strategy named in § 42c EnWG, measurements must be taken every 15 minutes [15], which a smart meter would certainly facilitate. 

Could the Hochschule participate?

Public institutions like the Merseburg University of Applied Sciences could potentially contribute to energy sharing by either producing solar energy on their roofs or free areas, or by renting these out to local energy cooperatives. They could also act as a consumer of locally produced energy with all the emerging benefits to the local grid. They could potentially also organize a peer-to-peer energy sharing project. However, since there are so many barriers to making energy sharing financially attractive in Germany, it seems unlikely that this will happen soon. A second issue that is unclear in that respect how a German university would proceed to decide to get involved as a prosumer and sharing participant. In Italy such cooperations are legally possible, and are widely considered and discussed [19]. Hence, it may well be that energy sharing cooperations involving universities will emerge in the future, especially if actors in Germany can find examples of self-governance pathways that allow universities to decide to sell commodities produced on campus, and along the way, investigate whether any other laws or regulations would stand against it. 

On the plus side, Germany has plenty of technical initiatives and ongoing research projects whose outcomes can contribute to the operation of energy sharing. The Otto von Guericke University Magdeburg has established a real-world laboratory to develop and test an intelligent multi-energy system (‘Intelligentes Multi-Energie-System SmartMES plus’) combining renewable energy production, consumption and heating in Ebendorf village, Saxony Anhalt [20]. The project’s aim is to reduce the curtailment (Abregelungen) of renewable electricity production and a more efficient use of the locally available resources. Another example is sunShare [21], a device and cloud-based software that enables direct physical sharing between neighbors that researchers are developing at the Technical University of Munich. Here, essentially, the major purpose is charging electrical vehicles from an existing PV installation. While not to be confused with energy sharing according to § 42c EnWG, as the grid is not used for sharing, these projects hint at the potential for energy sharing among engaged citizens and public institutions in Germany.

^[1] According to this law, private individuals, municipalities, SMEs, and cooperatives can participate; they are required to put multiple contracts into place (a separate contract for the shared electricity than from the residual electricity that will continue to come from the traditional network) and to use smart meters or another strategy that allows currents to be measured every 15 minutes.