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Power Purchase Agreements (PPAs) for solar power have been established in the industrial sector for years. In 2026, they are also gaining popularity in the residential real estate sector in Erlangen-particularly near the Siemens Campus, where tech-savvy tenants are showing interest in innovative energy concepts. How solar PPAs work, what benefits they offer, and what landlords need to consider from a legal standpoint.
Erlangen is one of the few medium-sized German cities where direct solar power supply is already widely practiced. The high proportion of academics and engineers in the city-shaped by the Friedrich-Alexander University of Erlangen-Nuremberg (FAU), the Siemens Campus Erlangen, and the medical technology clusters-creates a tenant base with an above-average understanding of energy concepts and contracts. Barriers to entry-such as the need for explanation and skepticism toward self-generation-are lower in Erlangen than in other cities.
Furthermore, Erlangen’s municipal utility company pursues an active climate protection strategy and supports decentralized energy projects. This cooperative attitude on the part of the grid operator simplifies the approval of metering concepts and the technical connection of PPA projects.
A Power Purchase Agreement is a private-law supply contract for electricity. The PV system owner (seller) commits to supplying the generated solar power to the buyer (tenant or commercial enterprise) for a fixed period at a pre-agreed price.
The opposite is traditional grid feed-in: The generated electricity flows into the public grid, and the owner receives the feed-in tariff set by law under the EEG (6-8 cents/kWh for new installations in 2026). With a PPA, however, the electricity is sold directly-without passing through the public grid-at the agreed-upon PPA price (typically 15-22 cents/kWh).
Tenant electricity under EEG § 21 is a legally regulated special case of the PPA: It takes place within a building and is subsidized by the tenant electricity surcharge. PPAs outside the building (e.g., electricity from a rooftop system on an outbuilding to the main building on the same property) do not fall under the tenant electricity regime but can be structured as a free PPA contract.
| PPA Type | Typical PPA Price (ct/kWh) | Term | Revenue for Landlord (€/kWh) | Administrative Burden |
|---|---|---|---|---|
| On-site tenant electricity | 20-26 | 5-15 years | 2-5 cents/kWh based on costs | Medium |
| Standalone PPA (residential building) | 15-22 | 5-20 years | 5-10 cents/kWh based on costs | Low-Medium |
| PPA with service provider | 15-20 | 10-20 years | 3-7 cents/kWh based on costs | Low |
| Virtual PPA (offsite) | 8-14 | 10-20 years | Not typical for single-family/multi-family homes | Low |
| PPA with commercial tenant | 12-18 | 5-10 years | 4-9 cents/kWh based on costs | Medium |
Source: Federal Network Agency Tenant Electricity Register Q2 2026; German Solar Industry Association (BSW-Solar) PPA Market Survey 2025; EEG 2023 § 21 Tenant Electricity Surcharge Scale.
Market trends show that PPA prices for residential buildings have stabilized at 15-22 cents/kWh in 2025-2026. This is approximately 30-40% below the current basic supply price in Erlangen (approx. 29-33 cents/kWh)-a clear advantage for tenants that significantly increases their willingness to sign a PPA.
Setting up a solar PPA for a residential building in Erlangen follows a structured process.
Establishing the technical foundation: A functioning PV system is a prerequisite. For a PPA involving multiple tenants in the same building, an intelligent metering concept with smart meters is required (mandatory for systems 7 kW or larger under the Metering Point Operation Act, MsbG).
Drafting the PPA contract: The contract governs price (fixed or variable), term, notice periods, price adjustment clauses, and compensation mechanisms in the event of underdelivery. Legal advice from a lawyer specializing in energy law is advisable. In Erlangen, there are advisory services specializing in energy law, including the energy advisory service of the Bavarian Consumer Center.
Clarify Metering Point Operation: Who is the metering point operator? Typically, it is the default metering point operator (GSB; in Erlangen, this is usually Erlanger Stadtwerke/N-ERGIE). For tenant-supply projects, a competitive metering point operator (wMSB) can be commissioned, which offers greater flexibility.
> The valuation tool from leadmarkt.ch provides a quick assessment of how a solar PPA model affects the income value of your rental property in Erlangen-free of charge and data-driven.
Billing and Reporting: PPA contracts require monthly or annual billing. Specialized software (e.g., from providers in the tenant electricity sector) automates these processes.
Tenant Communication: Explain the benefits to tenants transparently-especially the price advantage compared to the basic utility rate. Make it clear that participation in the PPA is voluntary and can be terminated at any time with reasonable notice.
A solar PPA is worthwhile for the landlord if the PPA price is above the production cost of the PV electricity and below the standard utility rate-so that both parties benefit. As a rough rule of thumb for Erlangen in 2026: A 20-kWp PV system on an apartment building with 8 residential units, where 70% of the output is sold to tenants via a PPA, generates annual net revenues of 2,000-4,000 euros after operating costs and the system’s annuity payments. This corresponds to a return on invested equity (after a KfW 270 loan) of 4-7%-attractive in an interest rate environment of 3.5-5%.
For a reliable profitability analysis, it is recommended to consult an energy consultant or a BAFA-certified energy consultant. In Erlangen, the Bavarian Consumer Advice Center (Erlangen branch) offers free or low-cost initial consultations.
Erlangen is one of Germany’s leading technology hubs-home to the Siemens Campus, Friedrich-Alexander University, and numerous medical technology companies. The tenant base is characterized by highly qualified professionals who live in the residential areas surrounding the Siemens Campus in Erlangen.
This tenant group is distinguished by above-average environmental awareness and an affinity for technology. Solar PPAs and tenant-generated electricity concepts are well-received; rental discussions with this target group show that an offer of green electricity serves as an additional selling point. According to local real estate agents (Q1 2026 data), the vacancy rate for PPA-supported apartments in Erlangen is measurably lower than the overall average.
Erlangen also has a robust grid infrastructure for smart grid applications. Erlanger Stadtwerke, the regional utility provider, is open to innovative feed-in and direct supply concepts and offers technical consulting for relevant projects.
For landlords wishing to offer solar PPAs, the following laws and regulations are key:
The Energy Industry Act (EnWG) governs supply obligations and transparency requirements. As an electricity supplier-even on a small scale-the landlord is subject to fundamental information obligations toward the electricity customer (tenant).
The Renewable Energy Sources Act (EEG 2023) governs the tenant electricity surcharge, grid feed-in, and the distinction between tenant electricity and open PPAs.
The Metering Point Operation Act (MsbG) governs the installation of smart meters, which are required for accurate PPA billing.
A solar PPA with tenants is not a tenancy law instrument-it is a separate energy supply contract. This has practical consequences: The PPA contract must not be part of the lease agreement and must not be structured as a prerequisite for the tenancy. Tenants must be able to terminate the PPA without jeopardizing the tenancy.
If a tenant terminates the PPA or moves out, the landlord must ensure that the departing tenant can seamlessly switch to the basic service provided by the relevant grid operator (in Erlangen: Erlanger Stadtwerke/N-ERGIE). Technically, this is ensured by the metering concept; contractually, the switch clause should be clearly formulated in the PPA.
Solar PPAs are a realistic option in Erlangen in 2026 for landlords with PV systems and tech-savvy tenants. The price advantage for tenants (30-40% below the basic service rate) creates benefits for landlords through increased tenant retention and positioning as a sustainable landlord. Implementation requires careful contract drafting and a functional metering framework-but is now feasible with service providers without significant effort on the landlord’s part.
The Siemens Campus in Erlangen sets standards for sustainable building concepts in its immediate vicinity. Landlords who position solar PPAs as part of a sustainability strategy benefit from the positive image impact in a market environment that increasingly values sustainability as a location factor. Erlangen is the benchmark for innovative energy concepts in the rental sector within the Nuremberg metropolitan region.
Before you develop your PPA concept, it’s worth conducting a current market value check: The valuation tool from leadmarkt.ch shows how energy concepts impact the income value of your Erlangen property.
The pricing of a solar PPA is one of the most important contract clauses. Three common models:
Fixed-price PPA: The solar power price is set for the entire contract term (e.g., 10 years). Advantage: maximum planning security for tenants. Disadvantage: If electricity prices drop, the tenant pays more than necessary-and terminates the contract. For landlords in Erlangen with a stable tenant base (e.g., Siemens employees with long-term leases), this can be an acceptable model.
Index-linked PPA: The solar electricity price is linked to an index-typically 80-85% of the local utility’s base rate. If electricity prices rise, the PPA price rises proportionally. If prices fall, the PPA price also falls. This model is fair and significantly reduces the risk of termination.
Floating Price (Variable PPAs): Less common in private multi-family housing projects, more common in commercial real estate. The price varies with the spot market of the EPEX electricity exchange. Too complex for residential buildings in Erlangen and difficult for tenants to understand.
Solar PPAs have tax implications for landlords that are often underestimated:
Sales Tax: The sale of solar power to tenants is a transaction subject to sales tax. Landlords who were previously exempt from sales tax as small business owners under Section 19 of the German Sales Tax Act (UStG) lose this exemption if their solar power revenue, combined with other revenue, exceeds the small business threshold (17,500 euros in the previous year). In Erlangen, with its high rents, this can happen quickly.
Income Tax: Proceeds from PPA solar power sales are considered business income under Section 15 of the Income Tax Act (EStG) or-for small systems with annual revenue under €30,000-have been tax-exempt since 2023 under Section 3 No. 72 of the Income Tax Act (EStG). The tax exemption under Section 3 No. 72 of the Income Tax Act applies only to self-consumption and the feed-in tariff, but not necessarily to PPA sales to third parties-in this case, a case-by-case review with a tax advisor is recommended. Before launching a PPA project in Erlangen, an initial tax consultation should therefore always be conducted to avoid surprises later on regarding sales and income tax. The costs of such a consultation are deductible as income-related expenses for rental income under Section 9 of the German Income Tax Act (EStG), which further reduces the actual tax burden.
Prepared by the my-home.de editorial team in collaboration with regional real estate analysts. Data as of Q2 2026.
A Power Purchase Agreement (PPA) is a direct supply contract between an electricity producer and a customer, who purchases the electricity at an agreed-upon price for a fixed term. In a solar PPA, the tenant purchases electricity directly from the PV operator. Tenant electricity is a special type of PPA that takes place within a building and qualifies for the EEG tenant electricity surcharge.
Typical PPA terms in the residential sector range from 5 to 20 years. Longer terms provide PV operators with planning certainty and allow for lower prices for the buyer. Short-term PPAs (3-5 years) offer more flexibility but less price certainty.
Yes, absolutely. Tenants have the right to choose their own energy provider. A solar PPA can only be entered into on a voluntary basis. Landlords may offer the PPA to tenants as an attractive option, but they cannot force them to accept it.
If you handle the process yourself, you can realistically expect an ongoing administrative workload of 3-6 hours per month (billing, data analysis, customer service). Specialized PPA service providers handle the administration for a flat service fee of 300-600 euros per year per system.
Revenue from solar PPAs is subject to income tax separately from rental income. For systems under 30 kWp installed on residential buildings, the tax exemption under Section 3(72) of the German Income Tax Act (EStG) applies to PV income. PPA pricing should be coordinated with a tax advisor.
Responsible Editorial
myhome Redaktion
Note on content
This guide article serves as general information about the real estate market in Nuremberg and the surrounding region. It does not replace individual tax advice, legal advice, or expert valuation in specific cases. For binding information, please contact a tax advisor, attorney, or certified appraiser.
Market data, prices, and statutory provisions may change at short notice. Despite careful research, we assume no liability for the accuracy, completeness, or timeliness of the content.
Article as of June 22, 2026
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