Germany's energy market was notably less volatile in the past year, having calmed considerably since gas and electricity prices skyrocketed in 2022 due to Russia's invasion of Ukraine.
But recent news about energy prices and inflation generally have been a bit of a mixed bag, leaving German households wondering what they should expect to pay for energy in 2025.
Industry experts have given some forecasts for how heating and electricity prices will likely change in the coming year.
Energy market expert Mirko Schlossarczyk told the German Press Agency (DPA) that electricity prices have largely stabilised since mid-2024: "We are now seeing a sideways movement or a slight increase for 2025 and 2026."
While the cost of generating electricity is generally becoming cheaper (thanks in part to the buildout of renewable energy technology), grid fees are steadily increasing. Experts suggest that Germany’s energy grid will require hundreds of billions of euros in investment in the coming years, which amounts to increased grid fees for customers.
In some regions, rising grid fees are expected to push up retail prices as early as 2025.
What prices can be expected?
From the beginning of 2025, the average price of ‘basic supply’ electricity is expected to rise 0.3 percent. That’s according to a recent analysis by the comparison portal Verivox.
Around a quarter of German households get their electricity from basic supply contracts, which are often provided by municipal utility companies.
Electricity customers in the basic supply would pay an average of around 44 cents per kilowatt hour from the turn of the year, including VAT and basic price.
But households in Germany may opt-out of the basic supply and instead arrange for energy contracts with other energy providers.
Prices vary immensely by region and by provider – Germany had 129 electricity providers in 2023 – but generally prices are expected to remain level or increase in the coming year.
READ ALSO: How German households can save on their electricity bills
If your own electricity or energy prices are set to rise, you may want to check if changing tariffs or providers is an option. But keep in mind that there are different costs and fees to consider when doing so.
Comparison portals like Verivox or Check24 can be helpful for comparing tariff prices. North Rhine-Westphalia’s Consumer Advice Centre also publishes helpful advice online.
How will gas prices for households develop?
Similar to electricity, gas prices are generally expected to rise in the coming year, specifically due to additional fees.
Gas and oil prices will also be affected by a higher CO2 price from the start of 2025 – which will rise from 45 to 55 euros per ton.
However, in the most immediate term, Verivox has calculated a price decline in the basic gas supply at the start of the year.
According to the Federal Network Agency, around 19 percent of all households purchased natural gas via a basic supply contract in 2023.
Heating oil prices look stable
Roughly half of the apartments in Germany are heated with natural gas, whereas heating oil is still used in just under a quarter.
Oliver Klapschus from the comparison portal Heizoel24 told DPA that he expects relative price stability in the coming year.
"Unless there are major geopolitical crises or catastrophes, there is no reason for heating oil prices to fluctuate up and down by more than ten cents," he said.
District heating prices
The district heating industry association AGFW suggests that prices will fall slightly in the short term.
"On average in Germany, we expect district heating prices to decline by a single-digit percentage, but in some cases significantly more," said an association spokeswoman.
District heating essentially involves transporting heat energy from a central heat source to municipal customers. It’s considered an important option for climate-neutral heating of buildings in the future, especially in large cities.
Around 15 percent of all homes in Germany were heated with district heating in 2023.
READ ALSO: The planned money and tax changes in Germany in 2025
With reporting by DPA.
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