Setting up a contract with an electricity supplier Germany (+ find good rates)

If you are just out of a WG into your own home, or simply just signed a contract as the main tenant, there are several things on your to-do list right now. One of the items on the list should be to set-up a contract with a german electricity supplier (just below “buying a sweet sweet couch“).

If this your first time dealing with that sort of thing, like it was for me a few years ago, i thought a little intro on the topic could help you pick a better contract and save you hundreds of euros. Here it goes.

How to set up a contract with a german electricity supplier

First off, let me reassure if you are in the midst of moving all your stuff and completely forgot to open an account with a energy supplier in Germany. You will still have access to electricity in your new place. They don’t just cut the power when the previous tenant has left the place. They actually have to provide uninterrupted service by law (EnWG § 36 Grundversorgungspflicht). Now, if being late in opening an account with a german electricity supplier ist not a big deal, you will still have to pay eventually. Simply state when you moved in, and you will have to pay whatever was used since then.

Otherwise, the process leading to a contract with an electricity provider in Germany is fairly similar to signing up for internet or for a car insurance. It is quite simple. Here is how to get the cheapest offers.

  1. Go online and compare prices for different plans on platforms like Check24, Verivox or Preisverlgeich.
  2. Find the offer that matches your consumption at a good price.
  3. Enter your personal information (have your german bank account ready there).
  4. Wait for contract confirmation.
  5. Let there be light!

If your German is a bit scruffy, there is a little list of words you might encounter during that process to help you fill everything in correctly at the end of this article. Usually, your new provider will make the switch for you and notice your previous supplier about the new contract.

Leading electricity suppliers in Germany are Vattenfall, E.ON, Lekker Energie, RWE, Yellow Strom & MVV. The market is very fragmented so you might encounter other names during your search. Those other companies are also fine but it has happened that some of them went bankrupted because of cash flow issues, losing their customers money for the people that had paid in advance. That’s why it’s important to make that you are picking a contract where bills are paid monthly or quarterly.

As a way to attract new customers in, many german energy suppliers in Germany will try to seduce you with 2 arguments: new contract bonuses & price guarantees.

About new client bonuses

This one is fairly common and can also be found in other sectors such as banking for example. Very simply put; they give you money when you become their customers. The idea is that even though they lose a little bit of money short-term, you customer lifetime value will offset that little amount. Although it can sometimes be very alluring to be given 100€ “for free” just to open a new contract, i would focus my selection criteria on other aspects of the service, especially the long-term costs.

Also be aware that this bonus usually only comes with the first bill. In other words, it’s more of a discount than cash in your hands.

About price guarantees

This argument is much more interesting from a customer point of view. We all know that the prices for electricity fluctuates a lot and tends over time to increase by a fair margin. This is due to investment in renewable energies, sharp demand and also the fact there is really no choice; electricity is vital for all of us. German electricity suppliers will then offer you a price guarantee over a certain period of time, during which there will be no increase in price paid per Kwh. This period of time usually varies between 2 or 3 years.

Quick reminder how billing works the first year

Electircity providers in Germany don’t communicate with one another. This means that everytime a client picks a new provider, the first year will be billed based on estimates. After the first year is up, your provider will have enough history to measure your actual electricity usage during the year.

This is why you may get money back (or pay more) at this point. You may have used less (or more) than the initial estimate.

After the first year, in the new billing cycle, your provider will adjust your rate lower or higher, based on the data at hand.

Let the currents flow (Photo by Ivan Bandura on Unsplash )

Things to know before picking an electricity provider in Germany

What if I don’t know which German electricity supplier I have currently?

If you just moved in, the previous tenant took their contract with them when moving out. If you don’t take any further action, you will receive a letter from Vattenfall, which the supplier by default in Berlin (Grundversorger). That’s why many people have Vattenfall and there is nothing wrong is that. However, electricity rates are often cheaper with competition especially with price guarantees & bonuses. If you are outside of Berlin, check which company might be the default german electricity supplier in your region. Many expats don’t bother switching supplier, costing them hundred of euros.

When signing up for a new contract, your new provider will notify the previous one that the contract has changed hands.

I am interested in picking providers that are only using 100% renewable energy, is that possible?

You can use filters on Verivox or Preisverlgeich to get to contracts only supporting solar, wind and other renewable sources. Germany is still big on coal and gas, but there federal nature of the country has created regional champions pushing for better options than that. It’s quite a rich offer if you want to support german electricity suppliers with that in mind.

Some fine prints to pay attention to when picking your contract

  • Pay attention to the duration of the contract and the conditions under which it can be terminated. If most energy suppliers in Germany have yearly contracts, it doesn’t mean you can cancel at anytime. i:e: even it can be terminated on a monthly basis, the contract still runs for another year or until the next contract renewal date.
  • Make sure to set your installments properly. It’s easier to pay your bills on monthly or quarterly basis than to get a massive yearly bill.

I hope this little guide helped. Happy picking 🙂

Vocabulary you might encounter during the sign-up process

  • Postleitzahl : your postal code
  • Verbrauch : your estimated consumption at home.
  • Vertragslaufzeit : Contract duration.
  • Mindestlaufzeit : Minimum contract duration.
  • Verlängerung : Duration of the contract when (automatically) renewed
  • Kündigungsfrist : Notice period – how much time in advance should the supplier be noticed of contract termination.
  • Preisgarantie – Preisfixierung : Price guarantee as mentioned above (for x amount of months)
  • Vorauskasse : Payment in advance (not advised, prefer monthly installments, see “Abschläge”).
  • Nutzung : Is this contract for your house (Privat) or your office – commercial (Gewerbe) space ?
  • Ökostrom : Electricity coming from renewable power production such as wind or solar plants.
  • Abschlagszahlung – Abschläge : Installments intervals
  • Sofortbonus & Neukundenbonus : Bonuses for signing up a new contract.

PS 2 : You might to have communicate the number of your electricity meter corresponding to your home to your german electricity supplier. It is usually located in your cellar. Ask to see your “Stromzähler” to your Hausverwaltung or Hausmeister.