The German government has approved a federal subsidy mechanism aimed at lowering electricity costs for households and businesses by reducing electricity network charges (German Cabinet press release, 03/09/2026). After allocating €6.5bn in 2026, Germany plans to provide annual subsidies of €5.525bn between 2027 and 2029 through its Climate and Transformation Fund.
The subsidy will be paid to transmission system operators and reflected in lower network charges, with the cost savings ultimately passed on to end consumers through electricity suppliers.
The measure forms part of a broader package designed to improve Germany's competitiveness, alongside the abolition of the gas storage levy, reduced electricity taxes for around 600,000 manufacturing companies, and the introduction of an industrial electricity price scheme for energy-intensive industries from 2027.
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