The end of the electricity and gas price brake: owners can expect these expenses

At the beginning of 2024, the electricity and gas price brakes will be a thing of the past. The German government introduced these measures in 2023 to counteract the drastic rise in energy prices. But what does the end of the electricity and gas price brakes mean for property owners? Will it now be expensive?

The good news first, the removal of the electricity and gas price brakes is much less dramatic than initially assumed. Nevertheless, consumers can expect energy prices to rise in 2024.

In the case of electricity prices, it is primarily the increases in VAT and the discontinuation of subsidies for grid fees that will have an impact on prices. This is because the announced €5.5 billion in subsidies for grid fees in 2024 will not materialise, which will lead to higher prices.

Although there are regional differences, Check24 predicts that the grid fees for electricity customers will be around twice as high. A sample household with four people and an annual consumption of around 5,000 kWh would then have to pay over EUR 100 net more, plus VAT.

Increase in gas prices

The comparison portal Check24 has also calculated that the rising CO₂ price in particular will have an impact on oil and gas prices. For a representative household with an annual gas consumption of 20,000 kWh (corresponding to a family of four), this means an additional net burden of EUR 60 per year compared to 2023. The lifting of the gas price cap next year will also lead to an increase in costs of a further EUR 90 for this household, according to Check24. In total, this results in an additional burden of EUR 150 in 2024 compared to the current year.

Changing supplier pays off

Due to the stabilisation of energy market prices, alternative suppliers are now much cheaper for new customers than the conditions guaranteed by price brakes. Switching contracts in 2024 promises considerable savings and remains unaffected by the expiry of the price brake. Owners should check whether their current kilowatt hour price for electricity is below 40 cents and for gas below 12 cents. If it is higher, it is advisable to switch tariffs promptly.

As recently as 2023, the energy price brakes capped electricity per kilowatt hour at a maximum of 40 cents, gas at 12 cents and district heating at 9.5 cents. The reduced prices applied to 80 per cent of a household’s previous consumption. However, these have been abolished since 1 January. The good news, however, is that most energy tariffs for electricity and gas are likely to be below the capped prices. According to Check24, customers with a basic supply will feel the impact of the abolition of the price cap more than consumers who have opted for alternative suppliers.

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Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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