Sustainability policies based on the economic rationale of providing
incentives to get prices right inevitably place a significant burden on
society and often raise distributional concerns. The social acceptability of
Germany’s energy transition towards more sustainable generation and usage of
energy is frequently the subject of such critical appraisals. The discourse
centres upon the burden imposed on electricity users as a result of the
promotion of renewable energy sources in the electricity sector in accordance
with the German Renewable Energy Sources Act (EEG). A regressive EEG surcharge
is suspected of driving up energy prices unreasonably and of being socially
unjust. It is also argued that high-income utility owners profit from the EEG
system at the expense of low-income electricity consumers (redistribution from
bottom to top). The aim of this paper is to examine the validity of these two
hypotheses and to show that both exhibit substantial theoretical and empirical
weaknesses, with climate and environmental policy being played off against
social policy in a questionable manner. At the same time, the article points
out remaining conflicts between energy policy and social policy and makes
corresponding policy recommendations for their resolution, thus contributing
to reconciling distributional concerns arising in the context of incentive-
oriented sustainability governance