On March 1, 2023, the electricity price brake will come into force to cushion the high electricity prices.
The price brake will then apply retrospectively from January.
We explain what the electricity price brake means for customers.
Berlin – From March 1, 2023 to April 30, 2024, the electricity price brake should bring relief.
It comes into force to protect consumers from further increases in electricity prices.
However, the electricity price brake does not mean that electricity prices will fall drastically.
Electricity will also remain expensive in 2023.
Electricity price brake simply explained: Electricity capped at 40 cents per kWh
With the electricity price brake, a price limit will be set retrospectively from January 2023 to April 2024 on most electricity.
For private individuals and small companies up to a consumption of 30,000 kWh per year, 80 percent of the consumption is limited to 40 cents per kWh.
The remaining 20 percent cost the price agreed in the contract.
In concrete terms, this means: The basic consumption for electricity will be available at a guaranteed price of a maximum of 40 cents/kWh.
The remaining 20 percent can also be more expensive - but this should encourage consumers to save electricity.
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In the coming week, the electricity price brake will take effect.
What does that mean?
© Hauke-Christian Dittrich/dpa
Electricity prices: 40 cents/kWh are already more expensive than usual
Important: 40 cents/kWh for electricity is still very expensive.
In summer 2021, before the price increases started, new customers were usually offered prices between 25 and 30 cents/kWh.
In February 2022, just before the war in Ukraine began, the price for new customers was 35 to 40 cents/kWh.
This value has now leveled off again, so anyone who signs an electricity contract now can get their electricity for less than the electricity price cap.
The situation in the summer of 2022 looked very different.
New customer offers for electricity reached record levels of up to 70 cents/kWh.
For this reason, the electricity price brake was introduced to protect consumers from such prices.
Electricity price brake: Relief directly on the monthly payment
The relief from the electricity price brake will be processed directly with the electricity suppliers from March 1st.
So consumers don't really have to do anything else.
However, you should receive a monthly credit for the relief amount starting in March.
If you then use 20 or even 30 percent less electricity over the entire year than in the previous year, then customers get extra money back.
Because the kWh saved are multiplied by the contract price.
Calculation example: Two-person household
A two-person household consumes 3,000 kWh of electricity per year.
By the end of December 2022, they purchased their electricity for 30 cents/kWh.
The monthly payment was 75 euros.
The contract price was adjusted at the end of 2022, now they pay 50 cents/kWh.
Your discount increases to 125 euros.
The electricity price brake will take effect from March 2023, so you get 80 percent of your consumption for 40 cents/kWh.
This reduces your discount to 105 euros per month.
They get the 20 euros as a credit from the supplier.
So the electricity is still more expensive than before the contract price was adjusted, but there is a direct relief.
But if the couple manages to use at least 20 percent less electricity in 2023 than in the previous year, they could get even more money back.
If they only use 2,400 kWh, the supplier owes them the money back.
The money is then offset against the contract price, i.e. with the 50 cents/kWh.
They get 300 euros back from the electricity supplier.
If you save 30 percent, you even get 450 euros back.
Since the electricity price brake also applies retrospectively to January and February from March, consumers must receive triple the relief amount for the first time.
From the calculation example above, this means that the household would receive a credit of 60 euros (instead of 20 euros) in March.
How do consumers find out how high the relief amount is?
Consumers must be informed by their electricity supplier by March 1st.
The letter must then state how high the current contract price is and how high the monthly payment is.
Consumers can then calculate their savings from this.
List of rubrics: © Hauke-Christian Dittrich/dpa