Our energy systems are undergoing significant change. Many countries have political ambitions to increase the share of renewable energy in their energy mix. This development entails the challenges of incorporating an increasing amount of volatile energy supply and a higher number of energy providers on distribution grid level. The smart grid could be a solution for these challenges. However, the roll out of smart grid technologies is rather slow. In this paper, we examine which barriers and solutions exist for energy system transformations by considering the case of smart grids in one specific regulatory environment. Fourteen in-depth expert interviews were conducted in Germany and qualitatively analysed using the grounded theory approach. First, a dynamic definition framework of the term “smart grid” was developed that incorporates contextual factors. Second, barriers to the implementation of smart grid technologies were gathered, and a theoretical framework to explain these barriers was derived. We identified cost and benefit, knowledge, and institutional mechanisms as barrier categories. Evolutionary economics is a framework than can explain barrier patterns in the case of smart grids. Third, possible solutions are described. These possible solutions are in line with the underlying assumptions of evolutionary economics.