Due to rising spot prices, Bundesnetzagentur, the German Federal Network Agency, has reduced the renewable energy tax or the so-called EEG tax paid by consumers for electricity bills in 2022 to a ten-year low of 0.0372 euros/kWh.

Bundesnetzagentur said on Friday that the tax to be paid next year is nearly 43% lower than the tax in 2021, and the tax is capped at 0.065 euros per kilowatt hour. In 2012, the tax was once below the threshold of 0.04 Euro per kWh, when it was 0.0359 Euro.

This reduction is not surprising, because rising spot prices for electricity have reduced the need for renewable energy subsidies. The price cut is also aimed at partially curbing the impact of price increases.

The EEG tax is designed to support the expansion of renewable energy in Germany and to make up for the difference between the market price and the market premium paid to power producers. The reduced funds will come from the introduction of carbon prices.

The total EEG tax and federal subsidies next year will reach 20.1 billion euros, covering the difference between the country's transmission system operators' fees for renewable energy (33.7 billion euros) and the expected electricity exchange revenue of 13.6 billion euros.

According to operators, the installed capacity of renewable energy in Germany will reach 8.2 GW in 2022, mainly driven by solar energy, while green power generation is expected to grow by nearly 5% to 239 TWh.