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What are the different components of the electricity price paid by households?
The electricity price is calculated by adding up the following main components: electricity procurement and sales costs, grid fees and government-controlled price components such as taxes, charges and surcharges levied on electricity.
In Q1 of 2025, the average electricity price for households returned to a level just under 40 cents/kWh. This brings average household electricity prices back to near the pre-crisis level. This can be seen from the development of the average household electricity price in Germany between 2012 and 2025 (excluding the effect of the electricity price brake, which reduces the electricity price for households to 40 ct/kWh as a proportion, and excluding inflation) as shown in the BDEW electricity price analysis of March 2025 (in German only).
The procurement and sales is strongly shaped by competition between electricity suppliers. This means that it can vary between suppliers.
By contrast, the other price components such as charges, surcharges, taxes and grid fees cannot be influenced by electricity suppliers. The most important easing of the burden on consumers was provided by the end of the EEG surcharge. Today, the cost resulting from the expansion of renewables is completely financed from the Federal Budget.
A look at the electricity invoice
Electricity prices on German electricity invoices are now composed of up to eight different factors, which can be roughly divided up into three groups.
Procurement prices reflect the purchasing price for electricity. They vary along with the wholesale electricity prices and accounted for an average of 43% of the total electricity price paid by households.
The grid fees serve to finance grid operations and the expansion of the power grid. The regulatory authorities of the Federation (Bundesnetzagentur) and the Länder ensure that these fees are fair and do no discriminate against any group of consumers. The dynamic expansion of electricity generation from renewables has created a need for investments in the transmission and distribution grids and resulted in rising expenditure on grid-stabilising measures that enable a secure supply of environmentally-friendly and affordable electricity into the long-term future.
Apart from the grid fees, a fee for the operation of metering points is also levied to cover the cost of these and the metering itself.
The following surcharges and charges are also part of the final electricity price paid by consumers: The surcharge as per section 19 Electricity Network Tariffs Ordinance serves to balance out losses made by the grid operators due to reduced individual grid fees (e.g. for electricity-intensive companies). Since 1 January 2025, this surcharge has been part of the so-called special grid-use surcharge. The offshore grid surcharge is levied with the aim of financing the connection of offshore wind turbines to the transmission grids.
Then there is the surcharge under the Combined Heat and Power Act, which serves to promote resource-efficient co-generation of electricity and heat and to compensate for the burden caused by the Combined Heat and Power Act, and the concession fee. This fee is levied by the municipalities in exchange for making roads and streets available for the operation of electricity grids and gas networks. Other government-induced price components include the electricity duty and VAT (19% on the entire electricity price including all of its components).
Electricity prices fall as a result of lower procurement and operation prices
The fall of the electricity price since the energy crisis is mostly due to lower procurement and operation prices. The special grid use surcharge introduced in 2025 has increased the price component composed of surcharges. This surcharge is used to ease the burden on distribution grid operations that have had to invest a great deal because of the expansion of renewables. The objective is to ease the high cost burden caused by the strong expansion of electricity generation from renewables in some regions.
The costs accrued by the easing of the burden on individual regions are shared across the country through the mechanism of a special grid-use surcharge. Apart from the surcharge for special feed-in side grid use, it also comprises the former surcharge as per section 19 Electricity Network Tariffs Ordinance. In 2025, the surcharge for special grid use was 1.56 cents per kilowatt hour (kWh), which is 0.897 cents/kWh more than the surcharge as per section 19 Electricity Network Tariffs Ordinance in 2024 (0.643 ct/kWh).
According to the monitoring report by the Bundesnetzagentur and the Bundeskartellamt, the special grid-use surcharge and the sharing of the grid-related costs of the expansion of renewables achieved by it cause an annual additional cost burden of approx. €33 for residential customers with an annual consumption of up to 3,500 kWh. At the same time, grid use fees in many regions in Germany are falling.
A more detailed overview of the development of electricity prices in the past years can be found in the complete BDEW analysis (in German only). You can find the detailed FAQs section of the BDEW on the composition of electricity prices here (in German only).