Neighborhood Solutions: The Future of Urban Energy Supply

Neighborhood solutions are a forward-looking method for supplying residential and commercial areas with renewable energy, especially through photovoltaics. Thanks to Solar Package 1 (2023), significant bureaucratic hurdles have been removed, making the implementation of such projects economically more attractive. C2sun energy experts have taken a closer look at these changes. To illustrate the potential of these solutions, we offer concrete calculations to demonstrate the economic viability and benefits for all parties involved.

Technical Implementation and Guidelines

Solar Package 1 particularly strengthens the tenant electricity model, which is crucial for neighborhood solutions. Tenant electricity projects receive a bonus of up to 3.79 cents per kWh for locally generated and consumed solar power. Additionally, many smaller PV systems are no longer subject to mandatory approval, which accelerates the construction of neighborhood solutions.

Example Calculation: A Typical Neighborhood

Consider a neighborhood with 100 residential units and a total rooftop area of 4,000 m² for PV modules. The installed PV capacity is between 700 and 800 kWp. With an average solar radiation of 1,000 kWh/kWp per year, a 700 kWp system could generate approximately 700,000 kWh of electricity annually.

Energy Demand in the Neighborhood:

  • Average electricity consumption per household: 2,500 kWh/year
  • Total consumption for the neighborhood (120 units): 300,000 kWh/year


The PV system would therefore cover the neighborhood’s electricity needs and leave an excess of 400,000 kWh, which could be used for communal electricity, fed into the grid, or stored.

Economic Feasibility Calculation

Revenue from the Tenant Electricity Model:
• Price for tenant electricity: 30 cents per kWh (including tenant electricity bonus)
• Feed-in tariff: 7 cents per kWh for excess electricity fed into the grid

Revenue Calculation:
1. Direct Consumption by Tenants:
– Self-consumption: 300,000 kWh
– Revenue from direct consumption: 300,000 kWh × €0.30/kWh = €90,000
2. Grid Feed-in (Surplus Electricity):
– Electricity fed into the grid: 400,000 kWh
– Revenue from feed-in: 400,000 kWh × €0.07/kWh = €28,000

Total Annual Revenue:
– Direct consumption + grid feed-in = €90,000 + €28,000 = €118,000

Costs and Payback

The investment costs for installing a 700 kWp system are estimated at €980,000, including installation, grid connection, and storage. Thanks to tax benefits and incentives under Solar Package 1, operating costs can be reduced to about €5,000 per year.

Payback Calculation:
Payback = Investment Cost / (Annual Revenue – Operating Costs) = €980,000 / (€118,000 – €5,000) = €980,000 / €113,000 = 8.67 years

C2sun Experts' Conclusion:

Solar Package 1 provides optimal conditions to drive the expansion of neighborhood photovoltaic solutions in Germany. With the new regulations and incentives, such as tenant electricity promotion and tax relief, the implementation of these projects is more economical than ever before. However, challenges remain, particularly in the coordination and financing of larger projects. C2sun sees enormous potential here, which can be fully realized with thorough planning and professional expertise. Neighborhood solutions are not only a step towards sustainable energy supply but also a significant contribution to the energy transition at the local level.