In recent years, Germany experienced an unprecedented boom in the production of solar electricity based on photovoltaic (PV). The massive spread of PV-technology among private households was mainly due to the fact that prices for solar panels were profoundly declining while the government guaranteed high-level feed-in tariffs to producers. The result is exploding costs with little to show for either environmental or domestic employment benefits. Indeed, this RWI Position policy paper documents that subsidies for PV, which have to be paid for by German consumers, amount to a total of €111 Bn so far. Moreover, with installed PV- capacities growing at a rapid rate, these costs will continue to accumulate, risking the general public’s support for the exit from nuclear and fossil-fuel energy. Instead of further continuing along the path of photovoltaic subsidies, as outlined in the German Renewable Energy Sources Act (EEG), this paper recommends a more cost-effective way to-wards an energy transition. Current reform efforts regarding the EEG should aim in this direction.