The energy revolution poses a fundamental challenge to the German corporatist institutional model. The push for renewables in Germany arose almost entirely outside the prevailing channels of institutional power. Eventually, federal legislation helped support the boom in local energy production that was already underway, and it encouraged the further development of new forms of community investment and citizen participation in energy supply. Recently, the federal government has tried to put the genie back in the bottle by shifting support to large energy producers. But, as this article shows, the energy transition has provided a base for local power that cannot easily be assailed. The debate over German energy policy is becoming a contest between centralized and decentralized models of political and economic power. Prevailing institutionalist theories have difficulty accounting for these developments. I analyze the local development of renewable energy by means of a case study of the Freiburg area in southwestern Germany, which has evolved from a planned nuclear power and fossil fuel center to Germany's “solar region”. Incorporating insights from ecological modernization theory, I show how the locally based push for renewables has grown into a challenge to the direction of German democracy itself.