Coalition's electricity price relief failed: Households continue to pay – up to 140 euros a year

It was a major promise enshrined in the coalition agreement: The CDU/CSU and SPD wanted to reduce the electricity tax to the European minimum – explicitly "for everyone." But that hasn't happened for the time being. In the coalition committee, the governing parties were unable to agree on a further reduction for private households. The reason: allegedly unaffordable. What's left: Millions of private electricity customers are left empty-handed.

Last week, the cabinet initially decided to reduce the tax only for the manufacturing sector, as well as for agriculture and forestry. But no sooner had the decision been made than parts of the CDU/CSU (Christian Democratic Union) raised doubts again – much to the displeasure of the SPD . They demanded that the tax relief apply to everyone.

But the demands were not heard. Chancellor Friedrich Merz (CDU) and Finance Minister Lars Klingbeil (SPD) justified their rejection with "budgetary constraints." According to the Finance Ministry, a reduction in electricity taxes for all consumers would cost the state approximately €5.4 billion annually – money that would have to be saved elsewhere. Which projects might be sacrificed for this purpose remained open.

Electricity tax: What the decision means for consumers

But that's off the table for now. Instead, consumers will continue to have to shell out more. The electricity tax in Germany is currently 2.05 cents per kilowatt hour (kWh) – the European minimum is just 0.1 cents. A reduction to this level would mean a saving of 1.95 cents per kWh. What seems like a small amount at first glance quickly adds up in everyday life.

An average single-person household with an annual consumption of around 1,500 kilowatt hours would have saved around €35 ​​per year – that's equivalent to around €2.90 per month, almost the cost of a streaming subscription. A couple's household with 2,800 kWh consumption would have paid almost €65 less per year – enough for a restaurant visit or a shopping trip.

A family of four would have saved up to 140 euros a year

For a family of four consuming approximately 5,000 kilowatt hours per year, the reduction would have amounted to just under €100 per year. A family with an annual consumption of 4,000 kWh would have saved €93, according to Verivox. Households with heat pumps, some of which consume 7,500 kWh or more, would have saved more than €140 annually. And for particularly energy-intensive households—for example, those with two electric cars or large older apartments—the savings could have been as much as €195 per year.

Lundquist Neubauer from the comparison portal Verivox told the Berliner Zeitung: "The reduction would have reduced the electricity price by around 2 cents. This relief would have been passed on directly by the energy suppliers, as it would have been a tax cut."

But until that happens, everything will remain the same. And there's unrest within the coalition, especially within the CDU/CSU. CSU leader Markus Söder , who had advocated for the relief, assured on Thursday that the electricity tax would be "reduced to the European minimum" for all consumers by January 2027.

A few days ago, CDU/CSU parliamentary group leader Jens Spahn also publicly emphasized that the electricity tax should be "permanently reduced for everyone." Now that sounds much quieter. On Thursday, Spahn was forced to backtrack on ARD's "Morgenmagazin" (Morgen Magazine): "We would have liked more." While the situation for many families and businesses is "extremely tense," and electricity costs "far too high," Spahn admitted. But the budget situation also leaves little room for maneuver. "We want solid finances—and after three years of recession, that's only possible gradually." As a "first step," he pointed to the relief measures already approved: the partial reimbursement of network charges, falling gas prices, the expansion of the mother's pension, and the new "active pension" model.

Criticism from all sides: A “broken promise”

There's been harsh criticism from the opposition, as well as from associations and the Green Party. Green Party parliamentary group leader Britta Haßelmann accuses the CDU/CSU of blatantly breaking its word: "During the election campaign, it was promised that every consumer would be relieved of their burden. And now they're suddenly saying: There's no money for that." The now-announced "maybe someday" is a "broken promise."

According to Haßelmann, there is certainly financial leeway – for example, in the special fund for climate protection and infrastructure, which is endowed with around 500 billion euros. The fund was created through an amendment to the Basic Law – also with the votes of the Greens. Michaela Engelmeier, chairwoman of the German Social Association, also calls it a "fatal signal." "Especially in times of high living costs, they need tangible relief."