faq
Whether households will have to pay more or less for electricity and gas in 2024 depends on many factors. Some price components are becoming more expensive, but there are also price reductions. Is it worth considering switching providers? An overview.
There will be a lot of changes to the costs of electricity and gas for household customers in the new year. The energy price brakes, which cap the price of a large part of consumption above a certain level, will expire at the end of the year.
Network fees for electricity are also rising significantly. The CO2 tax on gas will be increased at the beginning of the year. In addition, the VAT reduction for gas and district heating will no longer apply on March 1st. Both will be taxed at 19 percent instead of seven.
The wholesale prices for electricity and gas, which have now fallen again, provide some compensation. As a result, many providers announced price reductions at the turn of the year.
Is it worth changing provider?
Perhaps. In any case, the consumer advice centers advise electricity and gas customers to consider changing providers due to the additional costs announced for 2024. “Consumers should definitely check a tariff portal to see how high the savings could be when switching,” said energy expert at the North Rhine-Westphalia Consumer Center, Christina Wallraf, to the dpa news agency.
“Households should check: How much am I paying at the moment? What is my notice period? How long does my contract still run?” If you are satisfied with your current provider, you can inquire about other tariffs there and, if necessary, switch to a cheaper tariff.
For new contracts, the consumer advice center recommends a term of twelve months. With bonus tariffs, consumers should look at the conditions under which the bonus is paid out. Consumers should also be careful not to end up with a dubious provider. Households could do an internet search to find out whether there have been problems with a provider in the past.
How are electricity tariffs developing?
Very different. According to the comparison portal Verivox, basic suppliers announced 600 price reductions of an average of 13 percent in their basic service and special tariffs at the turn of the year. “For a three-person household with an annual consumption of 4,000 kilowatt hours, this corresponds to a relief of around 283 euros per year,” explained Verivox energy expert Thorsten Storck. At the same time, 83 increases of an average of six percent were announced.
According to the comparison portal Check24, network fees are rising by around 32 percent. With an annual consumption of 5,000 kilowatt hours, this means additional annual costs of 163 euros. According to Check24, the price differences between basic services and alternative providers are still large: the average price for basic services will in future be just under 44 cents per kilowatt hour, but for alternative providers it will be an average of just under 30 cents.
What does this mean for electricity customers?
For household customers, electricity market expert Mirko Schlossarczyk from the consulting firm Enervis expects end customer prices to remain the same or fall further under normal circumstances in the coming months.
“This should be more evident in existing customer contracts than in new customer contracts due to the different procurement strategies of suppliers,” says Schlossarczyk. The price reductions of the past few months have already been largely taken into account, so the effect is likely to be smaller. However, the noticeable increase in network fees has a counteracting effect. “This will affect existing and new customers equally from January 2024.”
How are gas tariffs developing?
Similar to electricity, there are also a lot of price reductions for basic gas suppliers. The comparison portal Verivox counted 500 with an average reduction of 15 percent. This compares to 56 increases of an average of 12 percent.
The comparison portal Check24 expects gas costs to average 2,537 euros for 2024 with an annual consumption of 20,000 kilowatt hours – 17 percent more than in 2023, which corresponds to 370 euros. The largest share of this, at 217 euros, was the increase in the VAT rate from seven to 19 percent on March 1st.
In the model calculation, the abolition of the gas price brake and the higher CO2 tax also result in higher costs. Network usage fees, on the other hand, fell slightly, it was said.
What does this mean for gas customers?
“Wholesale prices in the gas market are currently falling significantly,” says gas market expert Sebastian Gulbis from the consulting firm Enervis. As with electricity, what this means for end customer prices for household customers depends heavily on the energy companies’ procurement strategy. If suppliers have repeatedly secured long-term tranches for the coming year over the past twelve months, this could mean higher prices than with shorter-term procurement.
The reason is that at the beginning of this period the prices were significantly higher than recently. “This means that in the currently falling market, changing suppliers may well be worthwhile,” says Gulbis. It could be problematic for older contracts that were concluded, for example, at the end of 2022 and are still valid next year. These would sometimes be above the price brakes that are now expiring. “This could result in high costs for certain customers,” says Gulbis.