Electricity tax for all: Merz wants to cut it to the EU minimum for retail, services and households

What Merz announced on 12 October

After a two-day retreat of the CDU’s executive committee, party leader and Federal Chancellor Friedrich Merz announced in Berlin on 12 October 2026 that electricity tax (Stromsteuer) would be cut “for all” to the European minimum. He intends to fund this from budget headroom that would arise if growth firms up; according to Merz, the forecast now stands at 1.3 per cent for this year and 1.1 per cent for next year. There is no draft law and no date. Today, households and most businesses pay 2.05 cents per kilowatt hour; the EU minimum is 0.1 cents for households and 0.05 cents for business use. The German energy industry association BDEW welcomed the announcement on 13 October and puts taxes, levies and surcharges at 12.9 of the 38.9 cents in the price for new household customers. How the electricity price feeds into the heat price of a heat pump is shown in the guide to heat costs per kilowatt hour.

Which businesses and landlords still pay the full rate

Since 1 January 2026, the minimum rate of 0.05 cents has applied permanently only to companies in manufacturing (produzierendes Gewerbe) and in agriculture and forestry with annual consumption of at least 12.5 megawatt hours; according to the Bundestag, that is around 600,000 firms, including most skilled-trade businesses. Retail, hospitality, hotels, offices and service providers continue to pay the full rate, as do landlords for communal electricity and for heat-pump electricity in apartment buildings, and all households. On paper, a shop using 50,000 kilowatt hours a year would save around 1,000 euros net, a household using 3,500 kilowatt hours around 81 euros gross.

Why the relief matters more for heating than for lighting

Electricity tax is the lever politicians can pull fastest, and it hits the wrong users. Anyone heating with electricity today pays the same tax on every kilowatt hour of heat-pump electricity as on the shop-window lighting, while the gas boiler next door only bears energy tax and the CO₂ price. If electricity tax falls, the comparison between gas and heat pumps shifts noticeably, especially in apartment buildings and commercial properties.

The caveat belongs here too: a retreat announcement is not a tax assessment. A cut for everyone was already promised in 2025 and then, for cost reasons, limited to industry. Anyone now building investments or rent calculations on two cents less is counting on a law that does not yet exist.

What businesses and landlords should do now

1. Work out the electricity tax per metering point from your latest electricity bill to know the possible annual relief.
2. Check whether your business already counts as manufacturing and can claim the relief from the main customs office (Hauptzollamt).
3. Run heating and rent calculations with and without the cut, and only switch once a draft law with a commencement date is on the table.