Industrial Electricity Price: What the BMWE Draft Means – and Which Options Businesses Have Now

The debate surrounding Germany’s industrial electricity price is accelerating. An internal concept paper from the Federal Ministry for Economic Affairs (BMWE) now paints a clearer picture of how narrowly the proposed price cap is defined, who will actually benefit, and which transformation requirements are tied to it (Tagesspiegel Background, 2025).

What to expect from this article

For the vast majority of companies – especially medium-sized industrial firms and commercial businesses – the industrial electricity price will not apply. Yet it will still indirectly affect the broader corporate landscape: economically, politically, and strategically. 

This article provides a concise breakdown: What does the BMWE draft propose, who benefits – and who does not? Why will electricity costs remain high for many companies, what price levels are realistically achievable, which measures are currently advisable – and why companies need their own long-term energy price strategy.

The core elements of the industrial electricity price follow the EU state-aid guidelines CISAF (Clean Industrial Deal State Aid Framework) – and these requirements heavily shape the program’s design. According to the BMWE draft, 91 energy-intensive sectors will be eligible to apply starting in 2026. Any expansion of this list would require approval from the European Commission. 

At the center of the model is a state compensation between the actual electricity price and a target price of 5 ct/kWh – but only for up to 50% of a company’s annual electricity consumption. Companies must pay full market prices for the remaining 50%. This limitation — directly derived from CISAF — is viewed by many firms as a key weakness of the instrument. 

Mandatory investments tied to the industrial electricity price

At least 50% of the subsidy must be reinvested in transformation measures, including: 

• Expansion of renewable generation

• Installation of battery storage

• Demand-side flexibility (load shifting, peak shaving, etc.) 

• Efficiency measures that influence electricity demand 

• Electrolyzers or electrification projects 

These reinvestment obligations are also mandated by the EU — many companies perceive them as a burden, accompanied by administrative costs, expert opinions, and regulatory complexity. 

Companies that allocate at least 80% of their investments to flexibility measures may receive a 10% flexibility bonus. Additionally, the subsidy is intended to be degressive — i.e., companies may apply for higher relief at the start and less toward the end of the three-year period. 

The government estimates total costs of €3.1 billion for the program. At the same time, the industrial electricity price is limited strictly to electricity procurement — grid fees and surcharges are excluded, even though these are particularly high in Germany. 

Criticism of the industrial electricity price is widespread

Industry associations express sharp concern (Handelsblatt, 2025): 

• Effective relief is much lower than communicated — often just “mid single-digit percentage.” 

• 50% caps on electricity volume and subsidy allocation massively constrain impact. 

• The 48-month implementation deadline is unrealistic for many industrial operations. 

• Administrative complexity threatens to partially neutralize the benefits. 

The picture becomes clear: This is not a broad electricity price brake, but a targeted industrial policy instrument for a few sectors under strict conditions.

As multiple analyses emphasize, this is the core point: Only around 1% of German companies fall within these 91 sectors and are therefore eligible. Beneficiaries are largely from energy-intensive basic material industries: 

• Chemicals 

• Paper 

• Steel 

• Glass 

• Cement 

However, groups that suffer significantly from rising energy costs — but are not part of these sectors — do not benefit. This includes medium-sized industrial and logistics firms, commerce and service companies, real estate, municipal operations, and many technology-oriented SMEs. 

For them, the industrial electricity price provides no relief whatsoever — even if their energy costs are high or they face international competition. They remain fully dependent on their own strategies for cost reduction, risk mitigation, and decarbonization.

Electricity costs in commercial and industrial settings are still shaped by structural factors: 

• Rising grid fees (high regional variability) 

• Volatile wholesale electricity prices 

• Increased demand from electrification (fleets, buildings, processes) 

• Limited grid capacity, especially in growth regions 

• Low ability to forecast electricity prices over multi-year periods 

The industrial electricity price does not address any of these drivers. Therefore, cost pressure remains unchanged for most companies. 

Industry reports indicate that many firms already report reduced investments, relocation considerations, or cancelled expansion projects (Wirtschaftswoche, 2025). 

For the broader economy, the conclusion is clear: Energy remains a strategic cost and competitiveness factor — without political relief. 

Surprisingly to many, but supported by data: companies can achieve price levels close to the political target — or even below — through self-generation and flexibility measures. 

Typical values from implemented commercial projects:

Rooftop PV

• Levelized cost of energy: 7–10 ct/kWh (depending on solar concept and site conditions) 

Battery storage

• Reduction of grid-related peak loads 

• Significant savings on grid charge components 

• Time-shifting into favorable consumption windows 

• Usage of own or cheap energy in high-price periods 

Intelligent energy management (EMS)

• Dynamic optimization 

• Higher utilization of existing grid connections 

• Predictable energy flows 

Many medium-sized industrial companies achieve electricity costs of <10 ct/kWh through a combination of PV, battery storage and intelligent procurement — effectively matching the industrial electricity price without subsidies and without conditions. 

With additional storage capacity — especially front-of-the-meter batteries for market participation — costs fall even further while flexibility increases.

1. Use available space
Commercial rooftops remain one of Germany’s largest untapped energy resources. Roughly 80–90% are still unused (Solar Server, 2025). 

2. Add storage 
Storage is no longer an optional add-on — it is a prerequisite for: 

• Grid relief 

• Operational flexibility 

• Economic use of PV electricity 

3. Smart load management via EMS 
With rising grid charges, EMS becomes essential. It handles energy flows and operational priorities. 

4. Integrate charging infrastructure — don’t treat it as isolated 
Electrification without an energy concept increases costs unnecessarily. Charging infrastructure must be integrated from day one. 

5. Green power contracts as a supplement 
For companies with substantial residual demand, certified renewable supply is critical — for cost stability and ESG compliance. 

Notably, these measures are identical to the mandatory transformation investments required by the BMWE under the industrial electricity price — only they provide immediate benefit to all companies, not just the energy-intensive 1%. 

The industrial electricity price will deliver targeted relief to a small number of heavy industries. For the majority, energy costs will remain high, volatile, and driven by grid constraints and market dynamics. Therefore, another approach becomes central: companies must create their own structurally stable electricity price. 

This can be achieved through a combination of: 

• self-generation via photovoltaics, 

• flexibility through battery storage, and 

• precise control of energy flows using an intelligent EMS,  

• plus integrated charging infrastructure and certified green power to cover residual needs. 

The result is a coherent, resilient energy ecosystem that makes companies progressively independent from market volatility — creating a corporate cost corridor that functions outside political programs and can already reach price levels comparable to the proposed 5 ct/kWh subsidy in practice.