Rethinking the Cost of Going Green

  • Why it matters

    Why it matters

    The high cost of green electricity to consumers could make it less competitive in the heating and mobility markets, undermining Germany’s efforts to transition to a clean economy.

  • Facts


    • Following Japan’s nuclear disaster in Fukushima in 2011, Germany decided to phase out all nuclear energy in the country by 2022 and draw at least 80 percent of energy from renewables by 2050.
    • To expand renewable energy production, Germany has slapped a levy on electriciy bills, now making up 54 percent of the price per kilowatt hour and giving a retail price of 28.73 euro cents, or $0.31.
    • Taxes and fees make up just 27 percent of the price of natural gas and oil, making them more competitive in the heating and mobility markets.
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main source Julian Stratenschulte DPA – Electricity lightning power grid cable tower 37439623
Some people find German electricity prices shockingly high. Source: Julian Stratenschulte / DPA

Consumers in Germany pay some of the highest electricity prices in Europe, second only to Denmark. Most of what Germans pay, however, doesn’t go toward keeping the lights on.

At least 54 percent of the price per kilowatt hour, which currently stands at 28.73 euro cents, or $0.31, comes from state-mandated fees to support the country’s ambitious transition to renewable energy sources, according to Germany Association of Energy and Water Industries.

The power companies have grown concerned that the burden on private and corporate consumers could make green electricity a less attractive option for heating homes and offices and fueling automobiles.

“We are running into a paradoxical situation where the fees that made the expansion of renewable energy possible now stand in the way of further expansion because they shut off new markets for green electricity,” said Johannes Teyssen, the head of utility firm E.ON, at a conference on energy hosted by Handelsblatt in Berlin.

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