Anyone receiving deliveries of electricity pays a certain price for it. The electricity price for residential customers consists of three main components:

  • the price of the acquisition and sale of the electricity,
  • the fees for using the electricity grid,
  • and the state-imposed components of the price, such as taxes and the EEG surcharge.

The first price component is formed by competition between the electricity providers – it can therefore vary from one provider to another. The electricity consumers can in many cases save money by exercising care in their choice of electricity supply contract and checking whether it is worth switching provider or tariff.

In contrast, the electricity provider cannot influence the other components of the electricity price. This is because they are prescribed by legislation and government regulations.

According to the monitoring report 2018 compiled by the Bundesnetzagentur and the Bundeskartellamt (in German), roughly half of the electricity price results from the state-imposed price components. In 2018, they accounted for around 54%. The competition-based price component and the grid fees (including metering and billing costs) accounted for 22% and around 24% respectively.

What does this mean in practice? In 2018, residential customers with an annual electricity consumption of between 2,500 kWh and 5,000 kWh paid an average electricity price of 29.88 cents per kilowatt-hour (kWh). Of this figure, the acquisition and sale of the electricity accounted for 6.70 cents/kWh (infographic (PDF, 306KB)).

It is important to compare electricity tariffs. By switching providers, consumers can often save a lot of money. In 2017, the average electricity price paid by consumers under the basic contract with the standard local utility was 30.94 cents/kWh, whilst the average price paid by consumers under a different contract with the standard local utility or by consumers buying electricity from a different provider was 29.12 cents/kWh. Around one third of all residential customers currently receive electricity from their standard local utility under a basic contract. By switching providers, these residential customers can reduce their electricity bill.

Grid fees vary across the country, because they depend on the costs in the specific grid area and the electricity consumption in that area. In order to reduce regional differences in grid fees, the Federal Ministry for Economic Affairs and Energy submitted a bill to modernise the grid fee structure. The Act on the Modernisation of the Grid Fee Structure was adopted by the Bundestag on 30 June 2017. Further information can be found here. In 2018, according to the Monitoring Report compiled by the Bundesnetzagentur and the Bundeskartellamt (in German), the nationwide average was 7.19 cents/kWh including metering and billing costs (infographic (PDF, 255KB)).