Real estate · 6 min read

Photovoltaics as an Investment: Opportunities and Risks in 2025

This guide refers to German law and the German tax system. It is a translation of our German original and does not replace individual tax or legal advice.

Investing in photovoltaic systems has for years been regarded as an attractive way of combining capital with environmental impact. While rising energy prices, climate targets and technological progress are driving high demand, the market environment in 2025 is more complex than ever. New regulatory requirements, price developments and technical risks make careful analysis indispensable. Anyone investing in photovoltaics must understand the framework conditions and clearly distinguish opportunities from pitfalls.

For wealthy private investors, institutional investors and family offices, an exciting field nevertheless opens up: direct investments in photovoltaics can generate high returns if projects are carefully vetted, legally safeguarded and designed to be technically future-proof. A professional checklist and support from specialised advisers are the basic prerequisites for making investments secure and high-yielding.

The photovoltaic market in 2025: stability with new challenges

After years of growth, the photovoltaic market in 2025 continues to be highly dynamic. Demand for solar systems is rising, both on private roofs and in commercial projects. At the same time, increasing market penetration is creating new challenges: grid operators are reaching their capacity limits, projects are being delayed and legislative changes have a direct impact on returns. For investors, this means that project quality and contract design are more important than ever.

The German Solarspitzengesetz 2025 (Solar Peak Act) is particularly relevant: since February 2025, the EEG feed-in tariff (under the German Renewable Energy Sources Act, EEG) no longer applies when electricity prices are negative. As a result, the return on a system can be up to 20 per cent lower if no storage is installed. Anyone investing in photovoltaics must therefore also plan for storage options in order to secure profitability over the long term. The idea of guaranteed remuneration over 20 years is thus a thing of the past.

Profitability and return potential

Good projects still generate high returns: rooftop systems with a gross yield of 9 per cent are realistic, provided the calculation is based on realistic assumptions. Purchase prices lie within a target range of €950 to €1,150 per kWp. What matters is that calculations are not based on subsidy packages that have not yet been passed politically. Calculations are currently most often based on Solarpaket I (Solar Package I), even though its final form is still open – a risk that investors need to be aware of.

Power purchase agreements (PPAs), which are intended to secure fixed purchase prices over several years, should also be viewed with caution. Here, the security of the return depends largely on the creditworthiness of the contractual partner. Insolvencies or contract terminations can result in considerable losses. Investors should therefore insist on vetted and conservative calculation bases to avoid unpleasant surprises.

Legal safeguards and investor protection

A key difference from classic real estate investment is that there is no statutory consumer protection for photovoltaic investments comparable to the MaBV (Makler- und Bauträgerverordnung, the German Brokers and Property Developers Ordinance). Contracts are therefore often drawn up in favour of the sellers and contain gaps in investor protection. For investors, this means considerable risk if projects are not implemented as planned. Unclear provisions on rescission, damages or transfers of ownership are particularly problematic.

Investors should therefore only sign contracts that have been reviewed by a specialised lawyer. A payment structure that provides security is also advisable: payments by construction phase, escrow accounts or binding acceptance reports are minimum standards that should accompany every professional contract. Anyone who is careless here exposes their capital to avoidable risks.

Technical and organisational factors

In addition to profitability and legal certainty, technical factors play a decisive role. Every project should have its own site manager who visits the sites regularly, monitors construction progress and ensures quality. This is the only way to identify construction defects and delays at an early stage. Without this personal oversight, high follow-up costs threaten that directly erode returns.

In addition, the AC connection side is currently a critical bottleneck. Many regional energy suppliers take months to complete the grid connection and exploit regulatory loopholes to drag out delays. For investors, this means that even completed systems are sometimes unable to feed in electricity and the income calculation is thrown off balance. A careful project review should therefore take into account the permit situation and grid connection planning in detail.

Project volume and investment models

In 2025, attractive photovoltaic projects are in the range of €200,000 to €400,000 in purchase price volume. Larger projects of up to €800,000 are also possible, but require particularly careful structuring and, where appropriate, the pooling of several investors. It is important that the projects are financeable: bank financing is regarded as a mark of quality, as the banks themselves check profitability.

Furthermore, storage solutions are now more than just an option: they are a must for every high-yield project. Technical preparations such as inverters with a storage connection, space reserves and control systems should therefore be part of every plan. Storage not only provides protection against negative electricity prices but also additional income through self-consumption or grid stabilisation.

Additional economic and technical risk factors

An often underestimated cost driver is negative electricity prices. In 2024, they led to a reduction in income of around seven per cent, as no remuneration is paid during periods of negative prices. Although these hours are credited and remunerated retrospectively at the end of the term, the cash flow is shifted significantly towards the back end. Systems with a high EEG feed-in tariff are particularly affected, as their profitability can fluctuate considerably. Only a massive expansion of storage capacity can cushion these effects in the long term.

Technical and running costs are also frequently estimated too optimistically. Ground-mounted systems with tracking modules incur higher maintenance costs due to their moving parts than classic steel substructures. On top of this come predictable expenses that are missing from many calculations: tax advisory costs of around €600 a year, cleaning every two to five years at around €2 per kWp plus call-out charges, and the replacement of inverters, which must be budgeted at around €3,000 over a useful life of 30 years.

In addition, missing rights of way for cable routes or building permits, municipal pre-emption rights and long acceptance times on the part of energy supply companies can delay projects or cause them to fail. Payment schedules without an effective transfer of ownership and materials ordered in advance further increase the investor's risk. Last but not least, many providers calculate their profitability only on the basis of Solarpaket I. Although this has been part of German law since 2023, it has not yet been finally approved by the European Commission and could, in the extreme case, still be overturned.

Conclusion: opportunities only with rigorous due diligence

Photovoltaics remains a highly interesting investment in 2025 – ecologically sensible, economically attractive and technically mature. At the same time, the risks have risen considerably: negative electricity prices, delays in grid connections, overpriced projects and inadequate investor protection can severely impair returns. Anyone considering photovoltaics as an investment must therefore insist on quality, legal safeguards and realistic calculations.

The opportunities are obvious: stable cash flow over decades, protection against inflation and the chance to contribute actively to the energy transition. However, they only materialise if projects are vetted with expert support. A structured checklist, legal expertise and the involvement of experienced project managers are the basis for turning photovoltaic investments from a risky bet into a solid investment.