Direct marketing and the market premium: how a solar park earns its money

Anyone reading a solar park calculation for the first time usually stumbles over the same point: there is no fixed feed-in tariff, but a web of exchange revenues, a market premium and something called an award value. That is not a special case; it has been the normal case for years. Practically every solar park in Germany sells its own electricity on the market, and the EEG support only works as a top-up to a fixed reference value. This article explains the model step by step: who sells the electricity, how the market premium is calculated, where the award value comes from, and where an investor should look more closely.

What is direct marketing for photovoltaics?

Direct marketing means the operator sells the electricity from its plant on the wholesale market itself, instead of handing it to the grid operator in exchange for a fixed feed-in tariff. For plants with more than 100 kilowatts of installed capacity this is not a choice but an obligation (§21 EEG); the fixed feed-in tariff only remains available for small systems up to 100 kilowatts. A solar park of 10 or 20 megawatts sits a hundred times above that threshold and was therefore never part of the fixed-tariff world.

Selling itself does not mean the park operator runs its own trading desk. It appoints a direct marketer: a specialised trading house that forecasts the feed-in, places the electricity in day-ahead and intraday trading on the exchange, and takes the plant into its balancing group, meaning it assumes responsibility for scheduled and actual feed-in matching. A prerequisite is that the plant is remotely controllable (§10b EEG): the marketer must be able to read and, if necessary, curtail the feed-in at any time. For battery storage the direct marketer takes on a very different, far more active role across several markets; Direct marketing explained: day-ahead, intraday and balancing power explains it.

How does the market premium model work?

The market premium model (§20 EEG) combines exchange sales with a support payment that follows a simple formula: market premium = award value minus monthly solar market value. The award value is the plant's fixed reference value, usually its awarded bid from the auction. The monthly solar market value is the average exchange revenue of all solar plants in the respective month; the transmission system operators calculate and publish it monthly. If the market value is below the award value, the market premium fills the gap. If it is above, the premium is zero and the plant keeps the full exchange revenue; nothing has to be paid back. Because the premium moves with the market value month by month, it is called the sliding market premium.

Two subtleties of the formula matter for any calculation. First, the market premium is computed against the market value of all solar plants, not against what the project's own direct marketer actually achieved. If the marketer sells better than the average, the excess stays with the project; if it sells worse, the shortfall is the project's loss. Second, the money arrives from two sources: the direct marketer transfers the exchange revenue minus its fee, and the grid operator pays the market premium. In months with a low market value, the total comes out very close to the award value; it is the revenue floor on which banks and investors build their numbers.

Where does the award value come from?

For ground-mounted plants of one megawatt and above, the award value is set competitively: the Federal Network Agency tenders support volumes several times a year, developers bid a value in cents per kilowatt-hour, and the cheapest bids win at their bid value. Since Solar Package I (2024), individual bids may be up to 50 megawatts in size. The award applies for 20 years from commissioning and is thus the long-term backbone of revenue planning.

For current orders of magnitude: in the March 2026 auction the average volume-weighted awarded bid was 4.94 ct/kWh (range 3.99 to 5.10 ct/kWh); in the July 2026 round it was 4.79 ct/kWh (range 4.38 to 4.97 ct/kWh). The permissible ceiling price most recently stood at 5.90 ct/kWh. Values have been trending down for years because module and construction costs have fallen and competition for the volumes remains high; a project that already holds an award is unaffected, since its value is fixed for 20 years.

What is the solar market value?

The solar market value (Marktwert Solar) is the volume-weighted average exchange revenue of a kilowatt-hour of solar power in the respective month, published on netztransparenz.de. It is the second variable in the market premium formula and, from an investor's perspective, its most important weakness: because all solar plants feed in at the same time, they push down each other's price. The annual market value was 4.62 ct/kWh in 2024 and 4.51 ct/kWh in 2025, and within 2025 it ranged from 1.8 ct/kWh in June to 11.5 ct/kWh in January. As long as the market value stays below the award value, the market premium absorbs this decline; what suffers are revenues above the floor and any marketing without EEG backing. Why the market value is falling relative to the general power price, and how far this cannibalisation can go, is covered in depth in Negative electricity prices: what they mean for solar and storage investors.

What happens during negative electricity prices?

In quarter-hours with a negative exchange price, new plants lose their claim to the market premium entirely: since the Solar Peak Act (Solarspitzengesetz), this applies to plants commissioned since 25 February 2025 from the very first negative quarter-hour (§51 EEG). As compensation, the affected periods are appended to the end of the 20-year support period under §51a EEG; economically this is not a full offset, because of the time value of money. In 2025 the price was negative in 573 hours, and the trend is rising. For revenue planning this means: the award value is a floor for hours with positive prices, not an all-round guaranteed price. The mechanics in detail, including why a battery storage system at the same grid connection turns exactly these hours into charging windows, are covered in Negative electricity prices: what they mean for solar and storage investors.

What does the direct marketer do, and what does it cost?

The direct marketer takes on four tasks: it forecasts the park's feed-in, sells the electricity in day-ahead and intraday trading, carries the balancing group and imbalance energy risk for forecast deviations, and handles settlement and reporting towards the grid operator. In return it retains a marketing fee. There are no reliable public price lists; based on market observation, the fee for solar parks is in the order of a few tenths of a cent per kilowatt-hour, and below that for large parks in competitive tenders. Measured against an award value of just under 5 ct/kWh, it is a small but negotiable cost block.

If the direct marketer fails or none is appointed for a period, a fallback applies: the grid operator takes the electricity under the so-called fallback remuneration (Ausfallvergütung), but only at 80 percent of the award value and limited to at most six months per calendar year (§21 EEG). The fallback is meant as a transitional solution, not an operating model; a project stuck in it permanently gives away a fifth of its revenue floor. For project due diligence it is therefore worth asking who the marketing partner is, how long the contract runs, and what happens if it is terminated.

Market premium, PPA or merchant: how do solar parks secure their revenues?

The market premium is the most common way to structure solar park revenues, but not the only one. Three basic models sit side by side: the EEG model with an awarded value and sliding market premium, the long-term power purchase agreement with a company or utility (PPA), and pure merchant marketing without any hedge. In practice many projects combine these building blocks: part of the production runs through the EEG award or a PPA as a floor, the rest close to market. The EEG floor has one structural advantage no private contract offers: 20 years of term without counterparty risk. PPAs in turn are negotiable and available to plants without an award; how their price structures and risks work is explained in Understanding PPAs: how power purchase agreements make solar park revenues predictable.

What does this mean for investors?

For assessing a solar park investment, the market premium model is good news with footnotes. The good news: an awarded project has a 20-year, state-backed revenue floor that does not depend on the creditworthiness of an offtaker. The footnotes: the floor only applies in hours with positive prices, it says nothing about revenues above the award value, and between entitlement and payout stand the forecast quality and terms of the direct marketer. Concrete questions to ask any provider: which award value and which market value trajectory is the calculation based on? How many unremunerated negative hours are assumed? What share of revenues is floor, what share is market assumption? And what does the marketing cost? Anyone comparing the answers with the public figures in this article will quickly spot an overly optimistic revenue forecast.

Independent of the revenue side, the second lever of an entrepreneurial direct investment remains the tax side: through the investment deduction amount under §7g EStG, a substantial part of the investment can be pulled forward and offset against the top tax rate; IAB under §7g EStG: example calculation for battery storage shows the concrete numbers. We walk through both, a resilient revenue floor and the tax structure, in a no-obligation initial consultation using real project figures.