Electricity prices in Germany have been at record highs across Europe for years, placing a significant burden on private households. Hardly any other European country charges such high prices per kilowatt-hour, despite comparable security of supply and grid infrastructure. High energy costs, rising electricity taxes, increasing grid fees, and the consistently levied value-added tax on electricity drive up the final price, while political relief measures have so far remained limited. Electricity prices in Germany are therefore considered structurally excessive. (merkur: 18.12.25)
Electricity Prices in Germany Compared to Europe
A look at other European countries highlights the imbalance, as many neighboring countries have significantly lower prices than Germany. In France, Poland, and the Netherlands, households sometimes pay 14 to 20 cents less per kilowatt-hour, even though these countries also need to modernize their electricity grids. Electricity prices in Germany are therefore not primarily driven by high generation costs, but rather by government-influenced price components that make electricity an expensive basic service.
Without taxes and levies, the final price would be significantly lower, as the pure energy price is in the middle range for Europe. It is only through network charges and additional levies that the bill increases dramatically, placing Germany at the top of the end-customer comparison. This structure clearly differs from countries that are deliberately reducing their energy costs to relieve the burden on households and stabilize purchasing power.
Taxes and levies as key price drivers
Government surcharges have a permanent effect because they increase the price of every kilowatt-hour consumed. The electricity tax is levied constantly, while the value-added tax on electricity further increases the net price. This widens the gap with countries that operate with reduced tax rates or direct subsidies, thus limiting energy expenditures for consumers.
In countries like Ireland or Luxembourg, government compensation mechanisms lower the final price, so consumers actually pay less. Germany largely forgoes such instruments, even though they could significantly reduce price pressure. This is precisely a key difference that explains why electricity prices in Germany remain consistently high compared to other European countries.
Political Criticism of the Pricing Structure
The high costs remain politically controversial, which is why there is sharp criticism from the opposition. Sahra Wagenknecht stated: “The fact that electricity prices in this country are still the highest in all of Europe is killing our economy and impoverishing people.” This statement illustrates how heavily high energy costs burden daily life, especially for middle and low-income earners.
Wagenknecht is demanding concrete reforms, as she sees politics as the crucial lever. She criticizes in particular the level of grid fees and the fact that the promised reduction in the electricity tax, promised during the election campaign, has not yet materialized. A reduction in the value-added tax (VAT) on electricity to a lower level is also among her key demands, as this would provide immediate relief to households.
Government Points to Later Relief
The Federal Ministry for Economic Affairs and Energy counters this, pointing to measures already adopted that are scheduled to take effect in 2026. A government subsidy for transmission network costs is intended to lower prices and thus noticeably reduce electricity prices in Germany. The announced relief of up to three cents per kilowatt-hour could be significant, but depends on energy suppliers passing it on.
The transmission network operators have announced that they will pass on government subsidies, but regional differences are likely to remain. Some municipal utilities have already indicated price reductions, while others are still waiting. For many households, it therefore remains unclear when lower energy costs will actually be reflected in their electricity bills.
Why High Electricity Prices Remain a Persistent Problem
High electricity prices act like an additional tax on everyday life and influence consumption, housing, and financial planning. As long as network charges, electricity tax, and value-added tax on electricity constitute such a large share, Germany will remain expensive, even though actual electricity generation is competitive. Electricity prices in Germany remain a focus because they make political decisions directly measurable and directly affect millions of households.