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End of the EEG surcharge: is electricity really getting cheaper?

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Status: 01/07/2022 06:17

From today, the EEG levy on the electricity bill no longer applies. But what does this bring to the bottom line for electricity customers? Experts have calculated what relief consumers can now expect.

By Angela Göpfert, tagesschau.de

With an innovation earlier this month, electricity customers can hope for some relief in times of high energy costs. From today, the EEG surcharge will be reduced to zero euros. The surcharge via the Renewable Energy Sources Act was introduced in 2000; The aim was to fund the promotion of wind and solar systems through household and business electricity bills. More recently, the green electricity tax was 3.723 cents per kilowatt hour.

Suppliers must pass on discounts to customers

It was originally supposed to be completely canceled at the beginning of 2023. But the federal government has moved this step forward by six months in view of rapidly rising energy costs.

Electricity suppliers are legally obliged to pass on the reduction to customers. Also, the energy price cannot simply be increased on the same date to compensate for the loss. However, an increase in the price of electricity shortly thereafter is not prohibited by law.

Consumers will be relieved of 5.1 billion euros

Overall, consumers in the Federal Republic will be relieved by the abolition of the EEG tax of 5.1 billion euros, calculates the comparison portal Check24. However, this is unlikely to be noticeable immediately in the majority of households. Because the energy suppliers are not obliged to directly change the monthly deduction due to the reduction of the EEG surcharge.

Usually monthly deductions are only adjusted once a year. The savings made thanks to the abolition of the green electricity charge should therefore generally not be offset before the next annual statement.

Added to this is the VAT effect

Depending on their personal electricity consumption, consumers can expect noticeable savings. These savings are based on two effects: the abolition of the EEG surcharge first reduces the net price.

In a second step – as before – a VAT of 19% will be added to this reduced net price. With the reduction in the net electricity price, the VAT costs are also reduced proportionally, as the basis for calculation is now smaller.

But what does the abolition of the EEG surcharge actually mean? How much can consumers really save? An average individual household with an annual electricity consumption of 1500 kilowatt hours pays around 66 euros less, calculates Check24. A family consuming 5000 kWh of electricity reduces its electricity bill by 222 euros. This corresponds to a saving of 18.50 euros per month.

Electricity costs after the end of the EEG supplement
consumption dump
1500kWh 66 euros
2500kWh 111 euros
3500kWh 155 euros
4250kWh 188 euros
5000kWh 222 euros

Are consumers relieved?

However, the abolition of the EEG surcharge only partially mitigates the sharp increase in electricity prices. According to the comparison portal Check24, electricity prices for a family consuming 5000 kWh of electricity have increased by an average of 471 euros since October 2021. “Thus the abolition of the EEG surcharge mitigates the increase in electricity prices less than 50% electricity,” says Steffen Suttner, energy manager at Check24.

In the meantime, a look at the past also gives little hope: the first reduction in the EEG surcharge at the turn of the year 2021/2022 did not reach consumers due to the massive increase in purchase prices for suppliers.

The price of electricity has tripled

Since then, wholesale electricity prices have risen sharply again – to unprecedented levels. The Russian attack on Ukraine has again considerably aggravated the situation on the electricity market. The previous monthly record value dates from March: at that time, a megawatt hour cost an average of 252 euros on the Leipzig power exchange.

In June, the average price per megawatt hour on the spot market was 217 euros. For comparison: in June 2021, a megawatt hour cost only 72 euros. This corresponds to a premium of more than 200% compared to the previous year.

“Drops in the Bucket”

Given current developments in energy markets, reducing the EEG surcharge is little more than “a drop in the ocean”, says Kerstin Andreae, head of the Federal Association of Energy Industries. Energy and Water (BDEW).

Electricity customers should be prepared for the fact that costs will soon continue to rise. “By the end of the year at the latest, we expect to see electricity price increases across the board for millions of households,” says Thorsten Storck, energy expert at comparison portal Verivox. .

Several EU countries have lowered VAT

At the same time, the state could certainly do more to provide real relief to households when it comes to electricity bills. A reduction in VAT would be particularly beneficial for consumers.

Other EU countries are pioneers in this area. For example, the Spanish government lowered the VAT on electricity from 21% to 10% last year. Belgium reduced the VAT on electricity and gas from 21 to 6%, the Netherlands reduced the rate from 21 to 9%.

The EEG surcharge is not yet completely canceled

A reduction of the German VAT on electricity from 19 to 7% and a reduction of the electricity tax from the current 2.05 to 1.0 cents per kilowatt hour would, in combination with the abolition of the EEG surcharge, d ‘save a family of 459 euros per year the comparison portal Check24 calculated. In a single household, the savings would amount to 147 euros.

The EEG surcharge has not yet been formally abolished. On the contrary, their reduction to zero euros is initially limited to December 31, 2022. What the future of the EEG surcharge will look like from 2023 has not yet been decided politically. However, energy experts assume that sooner or later the surcharge for green electricity will be permanently abolished.

Source www.tagesschau.de

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