Why Is Electricity So Expensive in Germany?

German households currently pay 36.18 ct/kWh for electricity, according to Eurostat's latest half-yearly figures (2026-S1, standard household band of 2,500-5,000 kWh a year, all taxes and levies included). That is well above the simple average of the EU member states of 25.03 ct/kWh, and a change of -5.7% against the same half-year a year earlier (38.35 ct/kWh).

In the first half of 2026 only Ireland, at 38.7 ct/kWh, paid more within the EU; Belgium, at 35.8 ct, came close, while the consumption-weighted EU average stood at 28.3 ct. For a household using 3,500 kWh a year, the German price of 36.2 ct in that period adds up to roughly €1,270 a year. The same consumption costs under €500 in the cheapest member state, where a kilowatt-hour costs 11.39 ct — a difference of more than €800 a year. Current figures for every country are on our household electricity page.

A little under two fifths of a German electricity bill pays for the electricity itself. Eurostat's breakdown for 2025 (the average of both half-years, same household band) splits the price of about 38.5 ct/kWh like this:

• Energy and supply: 14.8 ct (about 38%) — buying the power on the wholesale market, plus the supplier's own costs and margin
• Network charges: 11.3 ct (about 29%) — fees for building, operating and maintaining the grid, well above the EU average of 8.2 ct
• VAT: 6.2 ct (about 16%) — 19% on top of everything else
• Electricity tax: 2.1 ct (about 5%) — the Stromsteuer of 2.05 ct/kWh, unchanged for households since 2003
• Other taxes, fees and levies: 4.2 ct (about 11%) — mainly the concession fees paid to municipalities for the use of public roads, plus surcharges for combined heat and power, offshore grid connections and grid-fee discounts for industry

Together, taxes, fees and levies made up about a third of the German price — 32% in 2025 and 34% in the first half of 2026 — and not more than half, as is often claimed. The EEG surcharge that financed wind and solar power was abolished in July 2022; since then that support has been paid from the federal budget rather than through the electricity bill.

Germany's energy transition is often blamed for the high price, and part of the bill does go back to it — but less directly than before. The country shut its last nuclear plants in April 2023 and is expanding wind and solar power quickly; renewables now cover more than half of electricity consumption.

That has two opposite effects. On the wholesale market, wind and solar push prices down in many hours, sometimes below zero: on sunny spring weekends German day-ahead prices regularly turn negative, as our analysis of the record negative prices of April 2026 shows. But the grid has to be rebuilt for the new system — new north-south lines, offshore connections and the cost of managing bottlenecks — and that is a main reason why network charges have kept rising.

The subsidies for renewables, by contrast, no longer appear on the bill: the EEG surcharge, which once exceeded 6 cents per kilowatt-hour, fell to zero in July 2022, and the federal budget has paid for the support since then.

The contrast with Germany's neighbours is less clear-cut than it used to be. In the first half of 2026 households paid 24.9 ct/kWh in France, where nuclear plants supply cheap baseload power and the state regulates tariffs, and 24.4 ct in the Netherlands, where a fixed energy-tax refund per household is larger than the taxes on a typical household's consumption. Luxembourg fell to 20.2 ct after the state took over the network charges, and Denmark to 23.8 ct after cutting its electricity tax almost to the EU minimum on 1 January 2026. Poland, on the other hand, at 30.0 ct, and Austria, at 32.6 ct, are now not far behind Germany.

The main differences lie in network charges and in political choices about taxes. In Germany taxes and levies take about a third of the price (34% in the first half of 2026), above the EU average of 28% but well below Poland's 47%. What really sets Germany apart is the combination: network charges far above the EU average on top of a tax share that is higher than in most member states.

Some relief has already arrived. In the first half of 2026 German household prices were 5.7% lower than a year earlier, partly because the federal government is paying €6.5 billion in 2026 to hold down transmission network charges. Further changes are under way:

• Network charges: the federal subsidy is set to fall to about €5.5 billion in 2027, so part of the relief would be reversed; provisional figures point to slightly higher network charges for households in 2027.
• Electricity tax: since January 2026 it has been cut to the EU minimum for manufacturing and agriculture, but not for households.
• More renewables and storage lower wholesale prices in more and more hours, and dynamic tariffs let households benefit directly.
• The energy crisis of autumn 2026 works in the other direction: wholesale power in Germany has become much more expensive since the war around the Strait of Hormuz cut gas supplies, and that will reach household tariffs with a delay.

For now, households save most by comparing suppliers, switching to a dynamic tariff if they can shift their consumption, or producing their own power with solar panels. What this winter means for energy bills is covered in our heating winter report.