Energy Sharing under Section 42c EnWG: Sharing Allowed, Practice Stalled
Energy sharing under Section 42c EnWG turns into a legal right on 1 June 2026: distribution grid operators must then provide 15-minute metering values, allocate volumes and settle with all participants. But the technical and digital base is missing across much of Germany. Smart meter coverage stands at around 5.5 percent, shared electricity carries full grid fees, and a real financial incentive is absent. This article explains how energy sharing works, why the smart meter is the bottleneck, how Germany compares within the EU, and what utilities should build now.
Energy sharing under Section 42c EnWG lets several people share electricity from a shared renewable installation through the public grid without losing their end-customer status. The provision took effect on 22 December 2025, and from 1 June 2026 distribution grid operators must enable it technically: 15-minute metering values, volume allocation and settlement with every participant. The legal right is here, but the practice lags. At the end of 2025 smart meter coverage in Germany was around 5.5 percent, against about 95 percent in Austria, and without an intelligent metering system there is no legally sound settlement. On top of that Section 42c carries no financial incentive: shared electricity bears full grid fees, levies and taxes, while Austria and Italy reduce the grid fees for shared power. The real gap is not the legal text but the data and process chain behind it. Experts expect broad everyday use only from around 2027 to 2029, with 2026 as the year of pilot projects.
What changes on 1 June 2026
From 1 June 2026 distribution grid operators must enable energy sharing technically. From that date several people can share the electricity from a shared renewable installation through the public power grid without losing their status as end customers. The legal framework is in place, but the practice lags behind it.
The duty is concrete. Grid operators must provide 15-minute metering values, allocate the shared volumes and settle with all participants. Some operators have already announced that they can only deliver the technical implementation later than the deadline. The link to metering is tight, which innobu set out in its article on the stalled smart meter rollout .
What energy sharing actually means
Energy sharing lets locally generated solar or wind power be passed to neighbours, tenants or members of a community. Unlike a tenant electricity model, the power runs through the public grid rather than only through a building's internal wiring. Every feed-in and consumption point needs metering in 15-minute intervals, and the shared volumes are then allocated and credited to the participants.
The allocation of the volumes can be static, with fixed quotas, or dynamic, varying over time with the generation profile. From 2028 energy sharing is also meant to become possible between neighbouring grid areas, which widens its reach beyond a single building or street.
The real bottleneck: smart meters
Energy sharing stands or falls with the smart meter rollout, and the rollout is stalling. Without an intelligent metering system with a gateway there is no legally sound settlement. The 15-minute values are the input that every allocation depends on, so the metering gap is the gap that matters.
Since 25 February 2025 new photovoltaic systems from 2 kilowatts must have an intelligent metering system and a control box. The Bundesnetzagentur opened supervisory proceedings in 2026 against metering operators that delay the rollout. Still, the share of households with a smart meter remains small, and energy sharing reaches only as far as the metering does.
The German and EU perspective
Energy sharing puts EU rules into national law, yet Germany uses the room for manoeuvre more cautiously than its neighbours. The deadline from the EMD III electricity market directive runs until 17 July 2026. The decisive difference lies in the grid fees: Germany keeps them in full on shared power, while Austria and Italy reduce them.
Section 42c contains no financial incentive: shared electricity carries full grid fees, levies and taxes. Austria and Italy reduce the grid fees for shared power and so create a real price advantage. Without that incentive, the German right grants permission to share but little reason to do so beyond the wish for local supply.
The community base differs accordingly. Germany has around 870 citizen energy communities with over 180,000 members, while Austria already counts around 3,700 energy communities on a smaller population. The legal framework alone does not create the dynamic. Higher smart meter coverage and a real price advantage do.
Challenges and risks
The central contradiction is a legal right without the infrastructure to honour it. That carries disappointment potential for consumers and effort for grid operators. If participants expect savings and instead see full grid fees, the gap between promise and practice becomes visible quickly.
Beware the right that stays on paper: A legal claim without a metering base, without reduced grid fees and with uneven processes between grid operators risks becoming a formal entitlement that few can actually use. Realistically, energy sharing becomes fit for everyday use only from around 2027 to 2029, with 2026 as the year of pilot projects.
What companies should do now
Utilities, municipal utilities and grid operators should treat energy sharing as a data and process topic, not a marketing topic. Whoever builds the metering and settlement chain now is ready to deliver in 2027, when broader demand arrives and the smart meter base has grown.
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Prioritise metering data and 15-minute flows
Build the processing of 15-minute metering values in parallel with the smart meter rollout, so that the input for any allocation is available where a smart meter exists.
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Define settlement and onboarding processes
Set clear settlement and onboarding processes for energy sharing communities, including static and dynamic allocation, so that new communities can be connected without manual workarounds.
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Run pilots with the housing sector
Use pilot projects with the housing sector and cooperatives to test the processes before mass operation, where apartment blocks already combine a shared roof and many metering points.
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Plan for cross-area sharing from 2028
Design the data architecture so that sharing between neighbouring grid areas, planned from 2028, does not require a second rebuild of the settlement chain later.
The right to share electricity exists in 2026, the means to settle it largely do not. Whoever builds the metering and settlement chain now turns the legal duty into a usable service. How new tariff models make the electricity market steerable shows how energy sharing fits into a wider shift toward time-variable pricing and grid fees under GDPR -compliant data handling.
Further reading
Frequently asked questions
Energy sharing lets several people share electricity from a shared renewable installation, such as a solar or wind system, through the public power grid without losing their status as end customers. Section 42c EnWG took effect on 22 December 2025, and from 1 June 2026 distribution grid operators must enable it technically. Unlike a tenant electricity model, the power runs through the public grid rather than only through a building's internal wiring.
Section 42c EnWG has been in force since 22 December 2025, and the duty of distribution grid operators to enable energy sharing technically applies from 1 June 2026. From that date operators must provide 15-minute metering values, allocate volumes and settle with all participants. Some grid operators have already announced that the technical implementation will only follow later.
Energy sharing needs an intelligent metering system with a gateway that records every feed-in and consumption point in 15-minute intervals, otherwise the shared volumes cannot be settled in a legally sound way. At the end of 2025 the smart meter coverage in Germany was around 5.5 percent, compared with about 95 percent in Austria. Without that data base the legal right stays on paper.
Not directly under the current rules. Section 42c contains no financial incentive: shared electricity carries full grid fees, levies and taxes. Austria and Italy reduce the grid fees for shared power and so create a real price advantage. In Germany the economic benefit for participants therefore stays small for now, which limits the appeal of energy sharing in 2026.
Experts consider broad everyday use realistic only from around 2027 to 2029. In 2026 pilot projects dominate, because the smart meter rollout, the metering processes and the settlement platforms are not yet ready across the board. From 2028 energy sharing is also meant to become possible between neighbouring grid areas, which widens the reach further.