Co-location, Co-benefits: How shared grid connections unlock battery value in Germany.

Germany’s energy landscape is undergoing a quiet transformation and it’s being driven not just by megawatts of solar, but by smart flexibility strategies like co-locating batteries and PV systems on shared grid connections. Recent regulatory changes, including the Solar Package passed in early 2024, are reshaping how developers approach hybrid projects, and the financial impact is significant.

A Simpler Path to Grid Sharing

Historically, connecting both a solar PV system and a battery energy storage system (BESS) to the same grid point in Germany was possible but conditional. Project owners needed grid operator approval if the combined injection capacity of PV and battery exceeded the allowed connection capacity, a process that was often uncertain or delayed.

Now, Section 8a of the updated EEG (Renewable Energy Act) provides legal clarity: grid “overbuild” where PV and BESS share a connection and exceed its rated capacity, provided they never feed in more than allowed at any one time — is explicitly permitted. Network operators must also examine this option when nearby grid capacity is constrained. This small shift is unlocking major possibilities.

What Happens When You Share a Grid Connection?

While the revenue per MW of storage declines when BESS shares a grid connection (due to limited feed-in rights), the overall project return can increase, especially with larger battery systems. In a 100% overbuild case, the drop in battery-specific earnings was offset by lower CAPEX per MW, shared infrastructure, and more efficient OPEX. The internal rate of return (IRR) climbed back to the same level as a standalone battery project demonstrating co-location’s strong economic case.

Full Hybrids Are Now a Reality

Another breakthrough in the Solar Package relates to the treatment of energy from co-located systems. Previously, if a battery stored grid power and was on the same meter as a PV plant, the stored solar energy could lose its “green” status and with it, feed-in premiums.

With the new regulation, full hybrid systems where BESS and PV share a connection and meter, and the battery can charge from both the PV system and the grid can maintain green energy status for stored solar, as long as a certified metering concept is in place. This opens the door to new commercial models, especially shaped PPAs with industrial offtakers that require predictable delivery profiles.

Bigger Batteries, Better Economics

Larger batteries make co-location more attractive. Why? Because certain fixed costs — like transfer stations, grid protection, and project management — don’t scale linearly. As the battery size increases, the unit cost per MW drops, and combined with shared grid infrastructure, the IRR improves.

For example:

• A 5 MW battery co-located with PV saw revenues of >€210,000 per MW per year.
• A 10 MW battery under the same setup dropped to >€200,000 per MW — but delivered a higher total project return due to lower specific CAPEX and OPEX.

Hybrid PPAs: Stability vs. Flexibility

With hybrid metering now enabled, developers can explore hybrid PPAs — contracts that bundle solar and battery output to provide shaped delivery profiles. These can attract a premium price and appeal to industrial offtakers seeking certainty. However, there’s a trade-off.

What’s Next?

While the policy still requires refinement — especially around metering standards and precise interpretation of the “green power” attributes — the direction is clear: Germany is embracing hybrid projects, and batteries are increasingly viewed not as standalone assets, but as essential partners in maximizing solar value and grid stability.

For project developers, this is a signal to think bigger and bolder. Co-location is no longer a workaround. It’s becoming a strategic default.

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