Dealing with the in and outs of getting connected and paying electricity bills is something many of those moving to Germany end up struggling with.
To help our readers get a better sense of how electricity contracts in Germany work, The Local spoke with CEO and co-founder of digital renewable provider Ostrom, Matthias Martensen, to answer some of the most common questions asked by The Local Germany‘s readers.
Can you please explain ‘Nachzahlung’?
“Unfortunately, Germany is still not very digital, so upon registering with an energy provider you need to submit an estimation of your consumption for one year. After one year you will be asked to submit your actual meter reading, so your provider can calculate your final bill.
If you have used more energy than estimated, you will have to pay the extra amount – this is known as Nachzahlung or ‘after payment’. However, if you used less energy than estimated you will receive a refund into your bank account. You should of course receive a statement from your provider, indicating whether you will need to pay, or be refunded.”
Does a landlord have any right to refuse if you want to change your electricity provider?
“This depends on your rental agreement. If you pay for your energy yourself, you have the freedom to choose your own supplier.
In the vast majority of cases in Germany, outside of a shared apartment, your electricity provider is your choice, and it is important that you compare the offers of providers, so that you pay only what you need.”
What are the major factors that influence my electricity prices?
“Energy prices are driven by two main factors—one is the raw commodity prices for coal, oil and gas, and the other is the weather. When there’s lots of wind and sun, Germany can produce a substantial amount of renewable energy, which is cheaper.
Of course, global events also have an effect on the prices offered by electricity providers, as we have seen over the last couple months.”
How often can we expect to see changes in our electricity bill prices? How will current events influence how much I pay for electricity?
“At Ostrom we try to minimize price swings as much as possible. As you can imagine, this has been difficult to do in the last few months due to the energy crisis and now Russia’s invasion of Ukraine. Unfortunately, Germany is still quite dependent on conventional power plants, a lot of which use gas and coal that is imported from Russia.
Over the next couple of months, a lot will depend on whether European governments will introduce oil and gas embargoes, as we have seen discussed in the media, or whether Russia will stop exports altogether. Both would mean higher electricity prices across all of Europe.”
What are some ways that I can reduce my electricity bill?
“There are several ways you can save on energy. The most effective is to create good habits like switching off lights when you aren’t in the room, hanging your clothes to dry instead of using the dryer or turning appliances off instead of leaving them in standby mode.
You can also ensure that your household appliances have a high energy efficiency rating, as shown by the EU energy label. You can also ask to see the Energieausweis, or ‘energy certificate’ for an apartment or building you are looking to rent, to see how energy-efficient the property is at retaining heat, for example.
Perhaps one of the most effective things people can do to save is provide regular meter readings via the app to the supplier. This means that your tariff can be more accurately calculated.
I see many electricity providers offering a ‘fixed price guarantee” – will I save money with one?
“Fixed prices automatically mean a tiered-system and you need luck when you sign up. In the current situation for instance this means you are locked into high prices. At Ostrom all customers are on the same price and if prices decrease, we will pass those savings to our customers. The majority of providers don’t like to take risks, and will pass the cost burden onto customers, even if circumstances change and energy becomes cheaper over time.
This is why we don’t offer fixed price guarantees at Ostrom. When prices decrease, so does our tariff. Lowering prices is something we’ve already done this year. With our flexible monthly plan, every customer pays the same price for electricity, and you can adjust your monthly payment at any time.”
In recent months the legislation surrounding contract lock-ins has somewhat changed, but the fact remains that traditional energy suppliers still require you to sign a minimum 12-month contract with them at a fixed price.
Not only is Ostrom a German electricity provider that passes savings onto the consumer, it is specifically designed for international workers and students in Germany. A simple tariff applies to all customers, and the more often you submit a meter reading, the more likely you are to save money.
Furthermore, all Ostrom documentation and contracts are in English and everything can be controlled from the smartphone app, including the submission of meter readings.
Finally, if sustainability matters to you, Ostrom sources their power from renewable sources, including the Maßbach Solarpark in Bavaria.
Ostrom is a good choice for those making the move to Germany. As Matthias Martensen told The Local: “We know that electricity contracts in Germany can prove bewildering. Since we’re a young international company ourselves, we have a natural understanding of the needs of a modern, flexible and international clientele. It’s in our DNA.”