Consumers: Out of convenience: customers pay billions too much

Consumers: Out of convenience: customers pay billions too much

Electricity prices for households are still significantly higher than before the crisis. Nevertheless, according to a comparison portal, many consumers remain in contracts that are too expensive.

According to the comparison portal Verivox, private households in Germany are paying more than five billion euros too much this year due to a lack of willingness to change electricity providers. Almost a quarter of households in Germany still receive electricity via the local supplier’s basic supply tariff – by far the most expensive tariff group.

Because these approximately 10 million households do not care about switching electricity providers or getting a cheaper tariff from their previous provider, they are paying almost 5.5 billion euros too much extrapolated to this year, as Verivox further announced in Heidelberg.

Consumers can save around 44 percent

According to the information, all households that do not look for a cheaper offer when building a house or moving in receive the basic supply tariff from the local electricity supplier. The advantage of the basic service tariff: It is available to all customers and can be canceled at any time. The big disadvantage is that it is very expensive.

A kilowatt hour (kWh) of electricity in the basic supply tariff currently costs 44.36 cents on average across Germany. In the cheapest available tariff with a price guarantee, the national average price is currently 24.7 cents/kWh. Households in the basic supply tariff could therefore obtain their electricity around 44 percent cheaper.

Electricity providers have been freely selectable for more than 25 years

In 2022, around 27.9 billion kilowatt hours of electricity were delivered to households as a basic supply, writes Verivox, referring to the current monitoring report from the Federal Network Agency. Based on this consumption volume, basic supply customers will reportedly pay around 12.4 billion euros for electricity in 2024. In contrast, the cheapest tariff would only incur electricity costs of 6.9 billion euros, which corresponds to savings of around 5.5 billion euros.

“For more than 25 years, households in Germany have been able to freely choose their electricity provider. The fact that almost a quarter of electricity customers voluntarily remain on the most expensive tariff is astonishing,” said Thorsten Storck, energy expert at Verivox.

Source: Stern

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