Germany: Planned revision of so called customer installations in the Energy Industry Act: legal certainty through transitional provisions?

Instead of adapting the definition of customer installations to recent case law of the CJEU and German Federal Court of Justice (BGH), a current draft bill now provides for a transitional arrangement for existing installations. This is intended to give legislators more time to develop a substantive solution. While dogmatically questionable, the interim solution resolves some pressing issues and gives operators time to clarify the facts about their customers installation so that they can react quickly when the final solution arrives.

Background

On 13 November 2025, the German Bundestag passed a draft bill to amend the EnWG and other laws (BT-Drs. 21/2793).

In line with the recommendation of the Bundestag’s Committee on Economic Affairs and Energy, a resolution was also passed to develop, as soon as possible, a regulation that is compatible with the requirements of EU law and ensures legal certainty for the future operation of constellations that fell under the previous definition of customer installations. The solution should avoid disproportionate bureaucratic burdens and make full use of the leeway that EU law allows national legislators. The Federal Government will also advocate for changes to the EU legal framework.

Decisions of CJEU and BGH

As a reminder: under the current version of the EnWG, customer installations are exempt from the regulatory requirements for grid operation. However, in recent rulings, the CJEU and the Federal Court of Justice (BGH) have found that the previous interpretation of customer installations is contrary to European law. The term "customer installation" must therefore be interpreted in accordance with European law.

As a result of these rulings, there has been uncertainty as to whether and under what circumstances, for example, decentralised generation concepts, neighbourhood concepts and tenant electricity solutions can still be classified as unregulated customer installations. Accordingly, many stakeholders have called for legislative clarification.

Planned transitional provision: Section 118(7) EnWG, new version

However, the legislator has avoided such clarification in the current draft. Although the draft also provides for a renumbering of the definitions in the EnWG, no substantive adjustment of the definition of customer installations is planned.

Instead, the draft provides for a transitional arrangement whereby the current legal status for existing installations will be preserved for three years (until 1 January 2029) and operators of existing customer installations will not be treated as network operators. The decisive factor for the application of this provision is when the connection to the energy supply network took place. This must have been completed by the time the amendment comes into force.

The transitional arrangement is intended to enable the legislator to work out the necessary adjustments and give the parties concerned time to make the necessary adjustments.

According to the explanatory memorandum to the law, for installations that are only connected after the amendment comes into force, the existing definition of customer systems should be interpreted in accordance with European law. For supply systems within a building, it shall still be assumed that these do not constitute a grid, but can be classified as customer installations. The ownership structure of the building supply system would be irrelevant in this context.

Assessment

Given the considerable uncertainty in practice, the transitional solution that has now been chosen comes may seem surprising at first. This is because it does not provide the desired (long-term) certainty. It remains unclear  what current (and future) customer installation operators will have to adjust to.

Although the reference in the explanatory memorandum for building installations provides some guidance, the legislator's assessment is not binding.

While the moratorium solution is dogmatically questionable, it offers guidance for operators and resolves the question of the urgent need for action. In this sense, the transitional solution should help to answer the most pressing questions without pre-scribing a path for the medium-term answer. Operators do not have to hectically and without sound legal basis reorganise their local grid setup. What the long-term solution will look like remains unclear. Operators should use the time available under the adopted draft to clarify the actual circumstances and review their legal situation. This will enable them to respond quickly to future developments.

The draft law still has to be confirmed by the Federal Council and is expected to come into force this year.