After last year’s electricity and gas price shocks, the situation for household customers has improved again. Consumers can now switch back to providers whose prices are sometimes well below the energy price caps for electricity (40 cents per kilowatt hour) and gas (12 cents per kilowatt hour). An overview.

Electricity prices have fallen

“Household electricity prices for new customers have been falling continuously since December 2022,” says electricity market expert Mirko Schlossarczyk from the consulting firm Enervis. Current offers are less than 30 cents per kilowatt hour. “For existing customers and in the basic service, however, the price level is noticeably higher and is currently just over 40 cents.” These prices have fallen only slightly in recent months.

The causes of the price drop

According to Schlossarczyk, the main reason for the decline in end user electricity prices is the significant drop in wholesale prices on the electricity exchanges. “The main driver for this is the enormous drop in the gas price on the spot market, which is now around 25 to 30 euros per megawatt hour and thus below the pre-war level.” The expert sees another cause in the weather-related sharp increase in the proportion of cost-effective electricity feed-in from wind energy and solar systems in recent months.

Basic supplier tariffs are often still above the electricity price brake

According to the comparison portal Check24, 76 percent of the electricity tariffs in the basic supply are still above the electricity price brake despite reductions. In the alternative supply, on the other hand, 88 percent of the tariffs are already cheaper than the price brake, says a spokesman. With an annual consumption of 5000 kilowatt hours, new customers paid an average of 31.4 cents per kilowatt hour to alternative suppliers. In the basic service, on the other hand, it is 43.2 cents. For comparison: According to the energy industry association BDEW, the average electricity price in Germany in June 2021 was just under 32 cents.

Comparison portal sees a trend towards price reductions

But something is also happening with the basic suppliers, i.e. the providers in a region with the most customers. According to a spokesman, the comparison portal Verivox “currently sees a clear trend towards price reductions”. But there are still some increases. The portal has so far registered 94 electricity price reductions averaging 12 percent for the months of June, July and August, but at the same time also 9 price increases averaging 36 percent.

For the coming months, Schlossarczyk continues to expect prices of 28 to 30 cents for new customers. In the case of existing customer contracts and in the basic service, on the other hand, he assumes that there will be noticeable price reductions and thus a convergence of price levels.

reasons for the price difference

“The reasons for the price differences in the end consumer prices lie in the procurement strategy of the energy suppliers,” explains the expert. As a rule, the suppliers stocked up on the exchanges in good time in order to compensate for extreme price fluctuations and not have to pass them on directly to the end customer.

“However, this hedging strategy has the consequence that many suppliers are only able to pass on the exchange electricity prices, which have fallen in the meantime, to their existing customers with a delay, since there are still larger trading volumes from the high price periods in summer and autumn 2022 in the portfolio.” Current new customer prices, on the other hand, are cheaper because their delivery date is imminent and these delivery quantities are largely determined by currently secured trading quantities.

gas prices have fallen

According to Verivox, gas prices are also falling. In the basic service, the portal has so far registered 75 price reductions by an average of 17 percent for June, July and August. Nine utilities have announced increases, by nine percent. Check24 has already registered 106 gas price reductions in the basic supply since January.

Despite these reductions, 90 percent of the gas tariffs in the basic supply are still above the gas price brake, the company reports. On average, consumers there paid 13.3 cents per kilowatt hour of natural gas. In contrast to this, 80 percent of the tariffs in the alternative supply are already cheaper than the price brake. Check24 gives the average as 9.4 cents. For comparison: According to BDEW, the average gas price in Germany in June 2021, i.e. before the start of the energy crisis, was a good 6 cents per kilowatt hour.

What do consumer advocates say about the development of energy prices?

“We recommend changing providers,” says Christina Wallraf, the energy expert at the consumer center in North Rhine-Westphalia. The prices for new customers are “already quite acceptable again”. Not only discounters are currently around the corner with low prices, but also municipal utilities or sales brands of municipal utilities.

“If you want to remain loyal to the municipal utility, then you can first look around for special tariffs at the municipal utility.” Almost every basic supplier has special tariffs, which are usually cheaper than the basic supply tariff. Wallraf pointed out that there are now more offers for night storage and heat pump electricity customers, after only very few providers had advertised for new customers at times last year.

Anyone who wants to change should critically examine the existing contract. It is important to find out the remaining term and notice period in order to find the right time to change providers. “If you are currently in the basic service, the contract can be terminated at any time, taking into account the statutory two-week period.”

Tariff comparison via comparison portals

The consumer advice center advises users of comparison portals to make an individual adjustment before making a tariff comparison. According to a message, the filter “direct change option via the portal” should be on display in order to display as many tariffs as possible. Consumers should also make sure that contractually agreed price guarantees are included in case energy prices rise again next winter. With the help of a short Internet search, those who want to switch should also check whether the provider has attracted negative attention in the past.

Could energy prices go through the roof again in winter?

Energy market expert Schlossarczyk considers this unlikely. “Due to the price cap in the retail price segment alone, the load limit for household customers is limited until April 2024,” he says. There will therefore be no price explosion for household customers in the coming autumn and winter.

Consumer advice center for changing providers