Three Companies Proving Green Electricity Can be Affordable and Accessible

Green electricity is the key to the success of the energy transition. But there are currently too few of them and they are too expensive. Or not? Three companies that prove the opposite.

Berlin – The energy transition in Germany depends largely on the expansion of capacities for renewable electricity. Solar and wind are the main sources of green electricity, but hydropower and biomass also play a role. The federal government’s hope: By expanding the generation options for renewable electricity, it will become cheaper – and thus convince even the last doubters to switch to electric cars, heat pumps and solar systems.

But currently electricity is expensive, much more expensive than natural gas or oil. Consumers currently pay around 30 cents per kilowatt hour for electricity, around half of which comes from renewable sources. Gas, on the other hand, costs 9 cents per kWh, heating oil around 12 cents. So a lot still has to happen for the plan to work. Or?

Combine green electricity tariffs with smart meters

In fact, more and more companies are advertising electricity tariffs that are far below the prices for fossil fuels. They also promise that the electricity they purchase comes exclusively from renewable sources, i.e. it is 100 percent green electricity. In the best case, the renewable electricity comes from your own photovoltaic system. But there are also offers with dynamic green electricity tariffs for those who do not have their own solar module.

Dynamic electricity tariffs are, as the name suggests, not linked to a fixed price, but rather variable. Electricity is purchased at times when it is particularly cheap on the stock exchange. This is the case at certain times of the day or night, but also when a lot of renewable electricity can be produced because the conditions are right (e.g. strong winds and lots of sunshine).

A smart meter is essential for all dynamic electricity tariffs: The digital electricity meter can obtain exactly this data from the electricity exchange in real time and purchase it at convenient times. Anyone who has a PV system needs a smart meter to distribute their own production in the best possible way. Anyone who produces a lot of electricity but doesn’t need that much at the moment can, for example, bring this excess electricity onto the grid – and contribute to a further reduction in prices on the electricity exchange.

To illustrate the possibilities of dynamic electricity tariffs, we present three companies that offer such tariffs. All three have slightly different approaches, but promise their customers significantly lower electricity prices. There are also many more companies that offer such options. It should even become mandatory for all providers by 2025.

Octopus Energy: Two tariffs for heat pumps and electric cars

The electricity and gas provider Octopus Energy has been offering dynamic electricity tariffs specifically for since the end of September 2023 Heat pumps and electric cars. No PV systems or electricity storage are necessary here. With the dynamic electricity tariff for the heat pump, “Octopus Heat”, electricity costs a flat rate of four cents less between 12 p.m. and 4 p.m. and between 2 a.m. and 6 a.m. than in the other time windows. So the idea is that heat pump owners program their heater to only turn on during these favorable times.

The normal working price for heat pumps at Octopus Energy is around 30 cents/kWh (depending on location). With the “Octopus Heat” tariff you only have to pay 26 cents. Extrapolated to a consumption of 6000 kWh per year, instead of 1800 euros per year, only 1560 euros are due. There is also the basic price, which for Octopus is 14 euros per month.

The company offers a similar tariff, “Octopus Go”, for electric cars. Electricity for charging an electric car between midnight and 5 a.m. is also four cents cheaper than the normal labor price.

“The two tariffs are exactly what our customers have repeatedly asked us about. “We offer a simple way to benefit from green electricity and market fluctuations,” explains Octopus Energy Germany boss, Bastian Gierull. “Many people are willing to postpone their consumption if it means they can save money. However, they are often still afraid of exchange electricity tariffs or complicated models. It shouldn’t fail because of that.”

1 point 5°: Halving electricity costs

The company 1Komma5° has already made some headlines with its dynamic electricity model. That’s not surprising, because the company’s promise sounds too good to be true: for an unbeatable 15 cents per kWh, customers can get electricity at 1 point 5°.

This dynamic model is primarily aimed at customers who produce their own electricity with PV systems. The purchase of exchange electricity is done in order to fill up your own storage facilities – for the days when your own system cannot produce enough electricity. With a digital energy manager, the so-called “Heartbeat” system, electricity is purchased on the stock exchange at times when it is particularly cheap. The company’s promise: The annual average grid electricity should never rise above 15 cents per kWh; customers sign a contract for this.

Theoretically, if the company’s promises ultimately come true, the electricity bill can be significantly lower. With an electricity consumption of 3000 kWh/year, you pay 900 euros per year at a standard market rate. If the price is permanently at or below 15 cents, the amount comes to just 450 euros.

Ostrom: Dynamic model for everyone with smart meters

Ostrom offers dynamic electricity tariffs for all electricity customers. It is a classic model that is the most common on the market. The only requirement is: you have to have a smart meter. The smart meter then checks every hour what the electricity prices look like on the exchange and then informs customers using the Ostrom app. This allows consumers to adjust their own electricity consumption to current prices.

You can also do more with the app: for example, tell it to charge the electric car when it is particularly cheap. Or the heat pump is connected to the app and only heats at convenient times.

Ostrom also works with solar providers. The company Soly, which produces PV systems, offers its customers an electricity tariff with a basic price of 6 euros/month plus network fees.

Verivox: Dynamic electricity tariffs are not always worthwhile

There are now many more providers who offer such tariffs – large providers are even obliged to offer a dynamic tariff. But they aren’t quite perfect either. After evaluating a five-year study, the comparison portal Verivox recently found that these electricity tariffs are not yet worthwhile for the vast majority of consumers. “Although there have been phases over the last five years in which dynamic tariffs were also cheaper, they are sometimes subject to enormous price fluctuations,” said Thorsten Storck from Verivox. They can even be slightly more expensive.

However, Storck assumes that this could change in the future if smart solutions and new storage devices come onto the market. Electricity suppliers with more than 100,000 customers must already offer at least one dynamic tariff, and from 2025 every supplier will be legally obliged to do so.

However, many consumers have not yet dealt with the issue. As a Verivox survey shows, 61 percent of respondents have never heard of dynamic electricity prices and 35 percent are familiar with this model. Almost half (49 percent) can basically imagine using a dynamic electricity tariff in the future.

With material from AFP