In direct marketing, renewable energy is sold on the electricity market via a direct marketer, who handles trading, forecasting and regulatory tasks. Learn how solutions like XENON help both plant operators and direct marketers optimize energy use, reduce costs and tap into market opportunities, such as flexibility trading.

What is direct marketing for renewable energy?

Direct marketing refers to the participation of the power plant in electricity markets such as the day-ahead or intraday market, rather than receiving a feed-in tariff subsidy for all injected electricity. This is typically done at the European Power Exchanges like EEX, EPEX, Nordpool or EXAA. On top of participating in the markets, renewable energy power plants that participate in the direct marketing (Direktvermarktung in German) are entitled to an on-top subsidy called the Market Premium (Marktprämiemodell in German). This subsidy is a one-sided “Contract for Difference" contract that ensures that the power plant always receives the minimum feed-in tariff amount on a monthly basis. Overall, the aim of direct marketing is to integrate renewable energies into the free market in order to ensure competitiveness and flexibility in the energy system. 

How does direct marketing work?

Under the Renewable Energy Act (Erneuerbare-Energien-Gesetz, EEG), operators of renewable energy plants are generally entitled to financial support for 20 years, starting from the date the plant is commissioned. The type and conditions of support depend on the plant’s size and commissioning date. Small-scale PV systems up to 100 kW usually receive a fixed feed-in tariff, while larger PV systems must participate in direct marketing via the market premium model. PV systems above 750 kW or 1 MW are typically subject to tendering. Special rules may apply to charging parks with integrated PV systems, depending on their configuration and degree of self-consumption.

With direct marketing, system operators generally do not sell their electricity on the market themselves. Instead, they work together with a direct marketer, a specialized service provider who handles the entire marketing process. The direct marketer forecasts the expected generation of the renewable energy plant, handles the sale of the electricity on the electricity exchange (for example, on the power exchange platform EPEX for spot or EEX for futures), manages the balancing energy requirements and ensures that all regulatory and market-related obligations are met. Thus, the direct marketer acts as the Balancing Responsible Party (BPR) to fulfill the balancing requirements.

For plants that are still within the 20-year EEG support period, the direct marketer handles the sale of electricity on the market, while the market premium is usually paid directly to the plant operator by the distribution system operator (DSO). This ensures that the operator receives the guaranteed minimum revenue defined under the EEG. In some cases, particularly in simplified service models, the direct marketer may receive both the market revenue and the market premium on behalf of the plant operator and then forward the total amount (minus a service fee) as a bundled payment. This way, renewable energy producers can access the electricity market without having to deal with trading or regulatory complexities themselves.

Direct marketing models in Germany 

In direct marketing, various models are available for selling renewable energy. Let’s take a look at the most common approaches used in Germany:

Market premium model

As mentioned before, the market premium model is the standard and most widely used model in Germany for large powerplants. Under it, producers can sell their green energy directly on the spot market (such as the EPEX spot). This allows renewable energies to compete on equal terms with conventionally generated electricity, with the price being determined by supply and demand in real time. To protect the renewable energy producers from market price fluctuations, they receive a market premium which is paid on top of the spot market price. This premium closes the gap if the solar market value falls below the guaranteed reference price set by the EEG’s defined feed-in tariff. It also compensates producers from additional operational expenses such as accurate generation forecasts, managing balancing energy requirements and taking market risks related to grid stability and trading. As a result, producers of renewable energy are guaranteed a minimum revenue which is equivalent to what they would receive under a traditional fixed feed-in tariff system and ensures financial stability while encouraging market participation. 

However, the market premium model can only be used during the 20-year EEG funding period, but can (and most of them do) stay on direct marketing. 

Regional direct marketing

In regional direct marketing, the electricity from the renewable plant is sold directly to local consumers or companies rather than the national electricity exchange. Its goal is to offer a local form of renewable energy that appeals to customers in the immediate area of the energy source like neighborhoods, nearby towns or regional businesses. However, this model is typically not eligible for EEG market premium as the electricity does not go through the standard market process required for the EEG framework. 

Due to its administrative and economic complexity it’s a rather rare choice for plant operators, as it requires contracts with many different companies.

Post-EEG direct marketing/Merchant PV

As many renewable installations built in the early 2000s are now, or will soon be, reaching the end of their 20-year EEG funding period, alternative marketing models are becoming increasingly important. After the end of the EEG support, renewable energy plants must compete directly on the free electricity market without a guaranteed income. This phase is often referred to as Merchant PV or Post-EEG direct marketing. While large-scale plants may enter into long-term power purchase agreements (PPAs) with utilities, corporations or energy traders, small-scale PV systems typically continue through direct marketing channels. These plants can be aggregated via virtual power plants and marketed on the spot market (mainly intraday) allowing flexible and decentralized participation in the energy market beyond EEG support.

How gridX supports Post-EEG and Merchant PV plants 

To help operators navigate this transition, gridX offers tailored solutions in order to optimize the revenue under market conditions. 

XENON

With XENON, plant operators can enable smart balancing of supply and demand via dynamic load management and peak shaving in rooftop PV, electric vehicle (EV) charging and storage systems. This supports reduced grid stress and lowers operational costs through automated, real-time control.

Imbalance and intraday market integration 

The XENON flex module enables users to actively participate in imbalance or intraday markets by forecasting asset flexibility from solar, batteries and EVs and pooling it for real-time market service to optimize imbalances and minimize imbalance costs through trading activities. On top of that, the module offers an application program interface (API) to manage aggregated real-time data and automate market responses. 

PV curtailment forecasting 

For rooftop PV systems, our forecasting tools help operators make the best use of the energy they generate. The system uses weather-based generation forecasts, updated every 10 minutes, to accurately predict when surplus power will occur. Instead of wasting this surplus energy due to grid constraints (curtailment), the solution intelligently redirects it to on-site assets such as batteries, electric vehicles or heat pumps.

Expert insights and future outlook for direct marketing models 

As renewable energy plants increasingly exit the 20-year EEG funding period, direct marketing is evolving from a subsidy-based model into a key enabler of advanced use cases such as Merchant PV, flexible trading and dynamic grid interaction. Rather than being just one option, direct marketing is becoming essential to access use cases like explicit flexibility through aggregated spot market trading, energy arbitrage under §19 EEG and avoiding curtailment obligations such as the 60% feed-in cap for new small-scale PV installations under §9 EEG. It also allows plant operators to respond to market signals by feeding in electricity when prices are high and prioritizing self-consumption when prices are low.

This shift makes close cooperation with direct marketers more important than ever, as they provide market access, real-time trading capabilities and technical aggregation. These services are especially relevant for small-scale PV systems, which currently inject their electricity into the grid regardless of market conditions and are not yet integrated into market-based mechanisms. Tamika Balken, Product Manager Flexibility at gridX, explains:

"Post-EEG direct marketing demands maximum flexibility. Our goal is to enable plant operators and direct marketers to utilize this flexibility and unlock new revenue streams like intraday trading."

Moving forward, smart trading strategies, real-time market access via direct marketers and automated energy management systems like XENON will be essential to ensure profitability and competitiveness in a subsidy-free energy market.