Germans are overpaying for their electricity by billions.

Germans overpay significantly for electricity.

Costly electricity prices are a common struggle among many German families. However, it's not just the worsening energy crisis that's causing this issue. Verivox estimates that insufficient research into finding better providers or cheaper tariffs is resulting in an extra five billion euros in expenditure.

Over a quarter of households in Germany purchase electricity using their local supplier's basic supply tariff, which is considered the most expensive group by Verivox. Out of the 18 million houses in the country, about ten million households have failed to switch providers or search for cheaper rates through their current supplier. By 2024, this could drive additional costs up to nearly 5.5 billion euros.

The basic supply tariff is usually offered to households that don't shop around for cheaper options during home construction or residency relocations. Basic supply's appeal lies in its flexibility, you can quit this contract anytime. On the other hand, basic supply tariffs are typically pricier. Verivox reveals that the average price per kilowatt-hour (kWh) for electricity in Germany under this tariff is currently 44.36 cents per kWh. On the other hand, the cheapest tariff with a price guarantee costs an average of 24.7 cents per kWh in the country. This means that households on basic supply could potentially obtain their electricity 44% cheaper.

Verivox calculations are based on the most recent report from the Federal Network Agency. It states that households under this basic supply aspect were provided with around 27.9 billion kWh of electricity in 2022. Comparatively, these households would spend approximately 12.4 billion euros on electricity in 2024, as per Verivox. However, if these families switched to the most cost-effective option with a price guarantee, their expenditure on electricity would decrease to around 6.9 billion euros, saving them around 5.5 billion euros.

Unawareness Fuels High Charges

Verivox's energy experts stress the importance of researching more affordable electricity tariffs. "Germans have been free to decide their electricity provider for more than 25 years now. It's astonishing that nearly a quarter of electricity consumers willingly remain on the most expensive tariff," commented Thorsten Storck, a Verivox expert, to various media outlets.

Changing electricity providers is quite simple for the average consumer: the new provider handles the termination process for you. No technical adjustments are required. Furthermore, the law guarantees a continuous electricity supply. According to Verivox, switching to a more economical provider could have a substantial impact on one's family budget. For instance, a three-person family with an annual electricity consumption of 4,000 kWh could save an average of 786 euros per year by switching from basic supply to the cheapest offer with a price guarantee. Verivox typically receives a commission from service providers when agreements are made.