Paying an Extra 550 Million Euros Each Year for Electricity? File That Under "Unnecessary Fees"
Households facing relocation incur excess electricity expenses amounting to approximately €550 million.
Moved recently? You might be among the millions wasting money on overpriced electricity. According to calculations by Verivox, a comparison portal, many households fail to switch energy providers after relocating, leading to unnecessary expenses totaling around 550 million euros annually.
Approximately four million German households move each year. When transitioning to a new city or apartment, a majority of them stick with their default electricity supplier, incurring higher costs in the process. This problem arises due to convenient defaults, lack of knowledge about different providers and available options, and administrative hassle.
The Impact of Inaction
The report by Verivox indicates that around 1.5 million German households changed their electricity providers in 2023 due to relocation. However, alarmingly, almost two-thirds of this number failed to seek a new, more affordable provider. Just over a quarter (25%) of all German households receive the pricier default supply tariff, resulting in additional costs of 550 million euros each year if this trend continues.
Currently, households with default supply contracts pay an average of 1281 euros per year for a yearly consumption of 2800 kilowatt-hours. Switching to the cheapest new customer tariff with a price guarantee can save around 548 euros per year.
Don't Forget to Cancel
Additionally, renters must manually cancel their old electricity provider when moving. Failing to do so can result in lingering responsibility for electricity consumption in the previous property, even after someone else has taken residence.
Starting from June 2025, electricity providers and network operators will offer the ability to change suppliers within 24 hours after contract termination, significantly simplifying the process for consumers.
Improve Your Moving Game:
- Shop Around Before Moving: Review energy tariff offerings from various providers to secure the best deal.
- Switch Providers Early: Initiate the process of switching to a cheaper provider before moving into the new apartment, ensuring a hassle-free transition.
- Negotiate with Landlords: Encourage landlords to allow you to select your preferred electricity supplier. In some cases, you may have the flexibility to choose your provider independently.
- Understand Your Contract Structure: Familiarize yourself with the difference between "warm rent" (including heating and hot water) and separate electricity costs, avoiding double payments or confusion.
- Look Out for Promotions: New customers can often benefit from bonuses and special offers.
By being mindful, researching providers, and understanding contracts, you can effectively shun unnecessary electricity expenses upon moving.
- Under the community policy, it is crucial for residents to be informed about the benefits of switching electricity providers, especially when relocating, to prevent the accumulation of unnecessary fees totaling around 550 million euros annually in personal-finance.
- In the realm of business and finance, a significant number of German households fail to seize the opportunity to decrease their electricity costs by choosing a new, more affordable provider, leading to an annual loss of 550 million euros respectively in both household and employer expenses (because employment policy also comes into play when considering costs associated with employee housing).
