Household of Four Anticipates Saving 220 Euros on Electricity Bills
A study conducted by the Institute of the German Economy (IWE) suggests that a four-person family, consuming roughly 4000 kilowatt-hours per annum, could potentially save around 220 euros annually through the government's proposed electricity price reforms.
The IWE arrives at this conclusion by advocating for several adjustments, including lowering the electricity tax to the European minimum for all consumers and abolishing several levies. These changes, accompanied by a reduced Value-Added Tax (VAT) burden, would provide immediate relief to consumers, surpassing the five-cent savings per kilowatt-hour pledged in the coalition agreement between the SPD and Union, according to the IWE.
However, experts caution that while this relief may provide a short-term solution, the German electricity system requires immediate reforms for long-term sustainability. To achieve this, the IWE proposes increasing the adoption of renewable energy sources, enhancing energy storage capacity, and deploying adjustable power plants at a pace commensurate with the growth of demand.
Should the electricity tax be reduced to the European minimum and three levies specifically be abolished—the Offshore Network Charge, the Renewable Energy Act Levy, and the Electricity Grid Charge Levy—small and medium-sized businesses could expect savings of approximately 4.6 cents per kilowatt-hour, while large corporations could save around 4.2 cents.
The German government, as per the coalition agreement, aims to lower the electricity tax for all to the European minimum level and reduce surcharges and network charges. Moreover, it plans to introduce an industrial electricity price for energy-intensive industries. Detailed plans regarding these reductions and the industrial electricity price are yet to be specified.
Simply shifting the costs from consumers to the federal budget may provide temporary relief, but the long-term feasibility of this approach remains questionable. The implementation of solutions that improve the overall efficiency of the electricity system is considered essential for sustainable and comprehensive cost savings.
Sources: ntv.de, hny/AFP
- Electricity Price
- Electricity Supply
- Federal Government
- Institute of the German Economy Cologne
- The Institute of the German Economy (IWE) proposes that vocational training in the energy sector could help foster a community policy of sustainable energy usage, which could benefit both personal-finance and businesses.
- The proposed government policy for industry includes an industrial electricity price and electricity tax reduction to the European minimum level, but experts advocate for simultaneous vocational training programs to ensure a skilled workforce that can manage the efficient use of energy.
- Finance ministries and energy agencies could collaborate in developing vocational training initiatives to support the energy sector, contributing to the long-term sustainability of the electricity supply and fostering energy efficiency in businesses and households.
