Tax Reduction Could Lower Electricity Costs by 7 Percent, Say Political Parties

In Germany, households are significantly burdened by taxes and levies on electricity prices. Several political parties are advocating for a reduction in electricity taxes, arguing that such a change could provide considerable financial relief for consumers.

According to calculations from the comparison portal Verivox, lowering the electricity tax to the minimum allowed within the EU could decrease electricity costs by nearly 7 percent. This adjustment would result in an overall savings of approximately 3 billion euros for German consumers.

The Green Party, the Free Democratic Party (FDP), and the Alternative for Germany (AfD) have included proposals for reducing the electricity tax to the EU's minimum in their platforms for the upcoming federal elections. The Christian Democratic Union (CDU) has also expressed support for lowering the electricity tax, while the Social Democratic Party (SPD) is calling for measures to alleviate the burden on consumers.

Currently, the electricity tax for private users stands at 2.05 cents per kilowatt-hour (kWh), whereas the EU minimum is just 0.1 cents per kWh. If the tax were reduced to this minimum, a family consuming 4,000 kWh annually could save around 93 euros, given that a decrease in the electricity tax would also lead to lower value-added tax obligations. For a two-person household consuming 2,800 kWh, the expected annual savings would be 65 euros, while a single-person household using 1,500 kWh could see savings of around 35 euros.

Energy expert Thorsten Storck from Verivox commented on the situation, stating that while the exorbitant electricity prices experienced during the energy crisis of 2022 are now behind us, current prices remain about 5 percent higher than they were prior to the crisis. He emphasized that households in Germany continue to face significant costs due to taxes and levies, and that reducing the electricity tax would be a pragmatic step toward alleviating ongoing household expenses.

As discussions surrounding energy costs and taxation continue, the proposals from various political parties indicate a growing recognition of the need for reform in the energy sector to support consumers amid rising costs.