Consumers in Germany encouraged to switch suppliers as energy prices fall
Almost a year on from last year’s sudden and substantial energy price rises, things are looking much more stable on the German energy market. Consumer experts have said that another steep rise is not on the cards this autumn and winter, and that customers who switch energy suppliers right now will almost certainly save money.
Energy prices falling again in Germany
The situation is improving once again on the German energy market. Consumers who are currently able to switch will find that providers are offering prices for new customers that are well below the energy price caps for electricity (40 cents per kilowatt hour) and gas (12 cents per kilowatt hour).
“Household electricity prices for new customers have been falling continuously since December 2022,” electricity market expert Mirko Schlossarczyk from the consulting firm Enervis told dpa. He said that some providers were now offering electricity for less than 30 cents per kilowatt hour. According to the consumer advice centre in North Rhine-Westphalia, reported in SPIEGEL, some providers are offering gas at 9 cents per kilowatt hour.
Gas prices back to pre-Ukraine-war levels
According to Schlossarczyk, the market is now showing the effects of a significant drop in wholesale prices. Gas prices in particular have dropped enormously to around 25 to 30 euros per megawatt hour, which is lower than before the Russian invasion of Ukraine.
But only new customers are likely to benefit from these price fluctuations. According to price comparison site Check24, 76 percent of electricity tariffs in basic supply contracts (Grundversorgung - the default supplier who supplies gas and electricity at general prices if a customer doesn’t take out a contract with a different energy company) are still above the price cap rate. In contrast, 88 percent of so-called “alternative providers'' are providing tariffs below the price caps.
For example, households with an annual consumption of 5.000 kilowatt hours can get tariffs at an average of 31,4 cents per kilowatt hour when they sign up as a new customer with an alternative supplier, while for the basic service the average tariff is 43,2 cents.
Consumer experts recommend changing energy suppliers
In light of this, consumer advocates are advising people to switch suppliers. “We recommend changing providers,” Christina Wallraf, energy expert at the consumer centre in North Rhine-Westphalia, told dpa, describing the prices for new customers as “already quite acceptable again.”
She advised people to check their current contracts to find out how long they have remaining and the applicable notice period for changing providers. Anyone who is currently on the basic service can terminate their contract at any point in writing, although a two-week notice period applies.
Looking ahead to the winter, the experts consider it unlikely that consumers will have to contend with sudden price increases once again. “Due to the price cap in the end customer price segment alone, the costs for private customers are capped until April 2024,” Schlossarczyk concluded.