The debate over the design of Austria’s subsidy framework has intensified since the last funding round, which saw its budget exhausted in just 33 seconds. Thousands of applications for photovoltaic and battery storage investment grants were left unfunded. Ahead of the third and final funding call, which opens in October, the Austrian government plans to present a redesigned framework that is expected to take effect next year.

On Thursday, the Ministry of Economy and Energy fleshed out its plans for a comprehensive storage offensive. Going forward, the focus of new solar funding will shift toward storage. Storage infrastructure will receive greater weight in the new grid infrastructure plan, while the permitting process for battery storage is expected to be accelerated. The ministry is also planning a dedicated funding program for intelligent energy management systems (EMS) for residential and commercial applications.

Core points of the planned reform

The ministry also detailed its vision for investment funding under the Renewable Energy Expansion Act (EAG) from 2027 onward. The highly competitive “first come, first served” model will be scrapped.

“Funding applications should in future be able to be submitted after installation and invoicing – based on the principle of the craftsman bonus,” the ministry stated.

Crucially for the storage sector, broad funding for small, standard photovoltaic systems will be phased out. Instead, financial support will shift toward energy management systems and smart storage to increase self-consumption and relieve grid congestion. Under the new rules, retrofitting existing solar arrays with battery storage and EMS will also become eligible for subsidies.

Specialized solar applications, including building-integrated photovoltaics (BIPV), agri-PV, solar carports, floating solar and noise-barrier installations, will remain eligible for support. The “Made in Europe” bonus will also be retained.

“The challenge is not that we generate too little cheap domestic electricity in summer. We have to make it available when we need it. Used correctly, storage brings cheap solar power from midday into the more expensive evening hours,” explained Austria’s Minister of Economy, Wolfgang Hattmannsdorfer.

The government’s primary goal is to shift excess solar generation into the evening peak, thereby reducing the need to import expensive power.

“For this we need more properly deployed storage – from households and large battery storage systems to our pumped hydro storage,” Hattmannsdorfer added.

8 GW of storage capacity needed by 2030

A dedicated storage study commissioned by the Ministry of Economy indicates that up to 8 GW of market-oriented storage capacity by 2030 would be economically beneficial for Austria. Depending on the scenario, this additional battery storage could reduce wholesale power prices by up to €2 per MWh in 2030.

Current forecasts indicate that Austria has around 3.2 GWh of installed battery storage, mostly in systems with capacities below 50 kWh, alongside 6.2 GW of pumped hydro storage.

Beyond restructuring subsidies, the Ministry of Economy highlighted the need for regulatory action by E-Control. Like its German counterpart, the Federal Network Agency, the Austrian regulator is currently drafting a new framework for grid fees and establishing criteria for system-serving storage.

“At the same time, the number and design of the criteria for system-serving storage envisaged in E-Control’s current draft must be reviewed again. The framework conditions must be practical and sufficiently broad so that the storage ramp-up is not slowed down by requirements that are too narrow to be met,” the ministry stated.

Industry demands action over words

The Federal Association Photovoltaic & Battery Austria (PV&B Austria) has broadly welcomed the shift in focus. The association has been lobbying for a realignment of the subsidy system and is in active dialogue with the ministry.

“We welcome the fact that the federal government is now explicitly recognizing the importance of storage for the energy system. However, it is crucial that the announced storage offensive now also translates into concrete measures,” said Vera Immitzer, managing director of PV&B Austria.

The industry group stressed that clarity on next year’s funding mechanisms must be established quickly, emphasizing that access should be uncomplicated and available early.

However, the sector remains somewhat skeptical. Hattmannsdorfer has repeatedly promised a storage offensive since taking office but has yet to deliver on implementation. A storage study commissioned last year by PV&B Austria already underscored the critical need for flexibility in the Austrian grid. A follow-up analysis confirmed that battery storage can already effectively shift solar generation away from midday peaks to high-priced evening periods.

“We are happy to continue to be available to the ministry as a sparring partner. Now it is a matter of words being followed by deeds. The industry is ready – it is crucial that the announced storage offensive is now actually implemented,” Immitzer said.

She noted that merely tweaking PV funding will not be enough to drive the necessary capacity additions.

“It must also continue to be possible to discuss tax relief. E-Control is also called upon to create appropriate, practical framework conditions for electricity storage. And grid operators must also integrate electricity storage more strongly into their grid development plans in the future,” Immitzer added.

Meanwhile, local solar installer Hansesun criticized the PV funding plans as “completely inadequate,” arguing for a simple tax break for systems through a climate investment allowance. Hansesun Marketing Manager Andreas Müller said that without such measures, customers would continue to lack certainty over whether their investments would receive funding.