Electricity Price 2026: What It Is Made Of and Which Policy Lowers It

The short answer

A household paid 37.0 cents per kilowatt hour for electricity on average in 2026 (BDEW electricity price analysis, autumn 2026, basis 3,500 kWh a year). This price splits into three blocks: 15.2 cents procurement and sales, 9.2 cents grid fees and 12.6 cents taxes, levies and surcharges. Only the first block – about 41 per cent – is negotiable at all. The remaining 59 per cent is set by the state or the regulator, and that is exactly where energy policy lowered the bill in 2026 and threatens to raise it again in 2027.

Anyone who wants to understand their electricity cost must therefore know which part is fixed and who sets it. Switching supplier affects only a good third of the price.

What is the electricity price made of in 2026?

The three blocks at a glance, following the BDEW analysis for the average household:

Block	2026 (ct/kWh)	Share	negotiable?
Procurement and sales	15.2	41 %	yes
Grid fees	9.2	25 %	no (regulated)
Taxes, levies and surcharges	12.6	34 %	no (statutory)
Total	37.0	100 %

The price is slightly below the prior year – mainly because grid fees fell by about 1.6 cents per kilowatt hour. That was not a market move but a policy decision (see below). Procurement and sales were marginally below the prior year, taxes and levies unchanged.

What is inside the state's third?

The "taxes, levies and surcharges" block of 12.6 cents is the most misunderstood. It can largely be broken down to the cent:

Component	2026 (ct/kWh)	Legal basis / source
Value-added tax (19 %)	≈ 5.9	UStG (on the total price)
Electricity tax (standard rate)	2.05	§ 3 StromStG
CHP surcharge (KWKG)	0.446	netztransparenz.de
§ 19 StromNEV surcharge	1.559	netztransparenz.de
Offshore grid surcharge	0.941	netztransparenz.de
Concession fee (standard tariff)	≈ 1.7	§ 2 KAV (up to 2.39)
EEG levy	0.00	abolished since 1 July 2022
Total	≈ 12.6

Two points stand out. First, value-added tax at about 5.9 cents is the single largest item of the state's third – it is charged on the entire price, including grid fees and surcharges. Second, the often still-cited EEG levy has been set to zero since July 2022 and is paid from the federal budget; anyone still seeing it on a bill should check the date. The concession fee varies with the size of the municipality and is capped for standard-tariff customers at 2.39 cents (§ 2 Concession Fee Ordinance).

Why policy lowered grid fees in 2026 – and does less in 2027

This is the real economic-policy lever. In 2026 the federal government supported the transmission grid fees with 6.5 billion euros from the Climate and Transformation Fund. That cut the fee at the extra-high and high-voltage level from 6.65 to 2.86 cents per kilowatt hour – a drop of about 57 per cent that reached the household bill as lower grid fees.

For 2027 this subsidy is to fall to 5.525 billion euros under the government draft. The transmission operators then calculate 3.54 cents per kilowatt hour instead of 2.86 – without the subsidy it would be 6.52 cents. The draft had its first reading in the Bundestag on 8 October 2026 and has not yet been adopted; the 2027 fees are provisional until then. For a household, the rising transmission-grid share – should the draft pass as it stands – means roughly 0.68 cents more per kilowatt hour, that is about 24 euros a year at the example consumption.

Who gets the reduced electricity tax – and who does not?

The most politically debated relief of the past two years was cutting the electricity tax to the European minimum rate. It has applied permanently since 1 January 2026 – but only to the producing sector and to agriculture and forestry (§ 9b Electricity Tax Act). For these businesses the electricity tax falls to 0.05 cents per kilowatt hour.

Households, retail, offices, practices and hospitality do not get this cut; they continue to pay the standard rate of 2.05 cents per kilowatt hour (§ 3 StromStG). The repeatedly announced general cut for all consumers did not come. That is no footnote: for the example household, a cut to the EU minimum rate would mean relief of about 70 euros a year – and it is not happening.

Worked example: a household with 3,500 kilowatt hours

Assumptions, disclosed: annual consumption 3,500 kilowatt hours (the basis of the BDEW analysis), average price 37.0 cents per kilowatt hour, split across the three BDEW blocks.

Block	ct/kWh	Euro per year	negotiable?
Procurement and sales	15.2	532 €	yes
Grid fees	9.2	322 €	no (regulated)
Taxes, levies and surcharges	12.6	441 €	no (statutory)
Total	37.0	1,295 €

Of the roughly 1,295 euros a year, about 763 euros – almost 59 per cent – are fixed before the household even compares a tariff. A hard switch of supplier that pushes procurement down by a tenth brings a good 50 euros. The grid-cost subsidy that policy paid in 2026 was worth about 56 euros to the household and shrinks in 2027. And every kilowatt hour saved lowers all three blocks at once. The order of the levers is thus clear – and the biggest one does not lie with the supplier.

What consumers and businesses should do now

1. Read your own bill: Have procurement, grid fee and taxes/levies shown separately. Only then can you see which block is worth negotiating at all.
2. Tackle consumption: Every kilowatt hour saved lowers procurement, grid fee and levies at the same time – the only lever that acts on all three blocks.
3. Compare suppliers, but weight it right: Switching affects only the 41 per cent procurement; large swings across the whole price are not to be expected from it.
4. Producing businesses: check the electricity-tax relief: If the business belongs to the producing sector or to agriculture and forestry, the application under § 9b to the main customs office is worthwhile (see components of commercial electricity).
5. Keep an eye on 2027: The shrinking grid-cost subsidy may let grid fees rise again. Anyone signing a fixed-price contract should weigh the term against that expectation.
6. Calculate self-generation: For owners and landlords, self-generated electricity is the most direct way out of the state's third – how that works in an apartment building is shown in the guide on PV and tenant electricity.