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Germany is currently undergoing a profound transformation of its national energy system through an abatement of greenhouse gas emissions and a simultaneous phase-out of nuclear energy. This energy transition, Energiewende, was first conceived by ecological and anti-nuclear movements in the 1970s, introduced into politics in the 1990s and 2000s, and became societal consensus following the Fukushima nuclear incident of 2011. The achievement of its objectives relies on a shift from fossil and nuclear energy to renewable energy sources and an overall reduction in energy consumption. This is a significant challenge for Germany's energy-intensive economy and centralized, fossil fuel-based energy system. It entails more distributed electricity generation, higher volatility of supply, different requirements to the electricity grid and infrastructure, and structural changes to the energy system and its actors. A successful transition will require comprehensive socio-technical change such as the development, introduction and diffusion of new technologies, infrastructure, organizations, and business models. To address this challenge, the political strategies and policies that devise and implement Energiewende seek to induce private firms to deliver the necessary novelties. Innovation is considered key to achieve Energiewende objectives, reduce the costs of transforming the energy system, and bolster the international competitiveness of German firms in the environmental and green energy space. Especially firms of the energy technology value chain, i.e. firms providing products or services related to the production, transport and consumption of energy are encouraged to explore, develop, implement and adopt technological and organizational solutions for the energy transition. To date there is a limited understanding to what extent and how Energiewende policies have indeed fostered such innovation and there are several controversies regarding their effect. Most importantly, controversies exist regarding the impact of the Energiewende's core policy Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG), the effect of the proclaimed "accelerated Energiewende" after Fukushima in 2011, and the changes triggered inside of firms. These controversies are due to three research gaps: first, Energiewende is often reduced to a single policy and not understood as a complex, systemic transition process, second, research with a comprehensive understanding of innovation is missing, and third, there is a lack of investigations on the actor level. This thesis contributes towards closing the research gaps and addressing these controversies by investigating the innovation effect of Energiewende through a series of qualitative, exploratory company case studies. An integrated conceptual framework that draws on the multi-level perspective in sustainability transitions research, environmental economics, and organization and management studies is used to investigate corporate innovation activities with episodic interviews with managers of incumbent and start-up firms from the energy technology value chain. The objective of the thesis is to clarify the recurrent controversies in the empirical assessment of an innovation effect, identify areas of tension, and draw implications for policy makers and firms as to how to induce and navigate innovation in the context of socio-technical change. Due to the exploratory, case-study based nature of the empirical research findings are not universally representative and applicable. The case study findings indicate that the Energiewende policy mix had a mostly positive effect on innovation activities. Especially the strengthening of particular markets and the systemic change induced by policies such as the Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG) presented firms with disruptions and opportunities to which they responded with innovation activities. This holds for innovation activities in a wide range of products, services, business models and internal organizational structures. The EEG in particular seems to have triggered innovation activities not only in the immediate technology area of RES technologies, but furthermore also in complementary technologies and – through the systemic change it enabled – also in wider systemic solutions. The accelerated Energiewende following Fukushima led incumbent energy suppliers to intensify innovation in their business models and boosted Energiewende-related innovation activities that were already ongoing in energy technology and materials firms. Inside of firms, innovation activities were influenced by strategic, structural and organizational parameters. For incumbent firms especially, the response to the changing energy system was tainted by a corporate cognition revolving around the superiority of a fossil-nuclear based energy system. The analysis also finds tensions with regards to the effect of Energiewende policy on innovation, in particular with respect to path dependence of systemic regulation, an emphasis on short-term incentives, and the focus on the national political jurisdiction. Implications from these results for policy makers and firms are presented.