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ELECTRICITY

The cheapest rates Spain’s electricity companies don’t want you to know about

Finding a cheaper tariff is one of the best ways to counteract skyrocketing electricity bills, but a leading consumer watchdog has warned Spain’s electricity providers are not always open to telling customers about the best deal they can get.

cheapest rates electricity spain
Finding the more affordable rates can be difficult to do, and often Spanish electricity companies make them deliberately difficult to get hold of. Photo: Colin Behrens/Pixabay

Like in many parts of the world, inflation triggered by the war in Ukraine has made the energy market incredibly volatile and sent household electricity bills soaring in Spain. The average bill reached €158 in August, an eye-watering increase of over 60 percent compared to 2021.

To give you some idea of just how much prices have risen in Spain, in August of 2020 the average electricity bill was €64, in 2021 it was €93, and in August 2022 €158.

According to recent figures from Eurostat, electricity bills in Spain have risen eight times more than in France and four times more than in Germany. Whereas the average Spanish household paid 60 percent more in August compared to 2021, in France it rose by just 7.7 percent and in Germany 16.6 percent.

The Spanish government has tried various methods to ease the burden on households. In June the tax (IVA) on electricity bills was cut from 21 percent to 10 percent, and then it was quickly reduced again from 10 percent to 5. The European Commission agreed to cap gas used for power generation at €40 per megawatt-hour known as the ‘Iberian Exception’, with the price limit projected to average out at €50 over the coming 12 months.

READ MORE: Spain to cut electricity tax by half to ease inflation pain 

The Spanish government predicted the measure — which will be in effect until May 31st 2023 — would lead to a reduction in household energy prices of up to 20 percent, yet it has done little to limit the rise of electricity bills so far.

READ MORE:

Unsurprisingly, many Spaniards are now seeking ways to cut down on their bills, whether it be by using the washing machine at certain times to take advantage of off-peak hours, or limiting their use of air-conditioning.

Another method of saving on electricity costs is finding cheaper tariffs.

Yet finding the more affordable rates can be difficult to do, and often the electricity companies make them deliberately difficult to get hold of. That’s according to Spain’s Organization of Consumers and Users (OCU), which have identified some of the cheapest tariffs on the market today. 

Understanding peak and off-peak

Spanish electricity companies offer different prices depending on the time of day you use your electrical appliances. The tariffs are often broken down into hora punta (peak time), hora llana (flat time), and hora valle (off-peak).

If you live in Spain, this is why you might’ve heard the incessant spinning of washing machines through the night in recent months. Nowadays many people simply wait until the weekend, when the tariffs are always off-peak.

So, if you’re thinking about switching, which are some of the best electricity rates you can find in Spain?

Repsol Tarifa Largo Plazo

According to the OCU, the Repsol Tarifa ‘Largo Plazo’ can only be found via this link, because the offer is actually hidden on the Repsol website. And for good reason, too. The Repsol tariff is among the best offers the  market in terms of price per kWh consumed, although the power for off-peak time is a little more than some of the other offers on the list.

The tariff is non-permanent, with a fixed price rate for 3 years.

kWh Prices

Price per kWh consumed: €0.17/kWh.

Peak hours: €29.90 per kW.
Off-peak hours: €29.90 per kW.

Iberdrola Online Plan

The Iberdrola Online Plan, which you can find here, is only available until September 30th, so be sure to take advantage of it as soon as possible.

Using Iberdrola’s online tool, you can select a kW rate and it will give you price estimates for the different values. If you’re environmentally minded, Iberdrola’s Online Plan claims to use 100 percent green electricity, so you can enjoy renewable energy and reduce your CO2 emissions.

There’s also 14 hours of savings during the night up until mid-morning.

This plan is only for customers who take out the contract online, as the name suggests, and features entirely electronic billing.

kWh Prices

Price per kWh consumed: €0.159353 + metered gas cost (in August €0.161529 /kWh).
Price per kW contracted during peak hours (fixed term): €30.66747.
Price per kW contracted during off-peak hours (fixed term): €4.104338. 

Not the prices will be revised in line with the Consumer Price Index (CPI) on January 1st. 

Octopus Energy

Octopus Energy tariffs are not permanent and is all done online, which allows you the flexibility to move around again in the future if you come across a better offer. Octopus offer two fixed prices:

Octopus 3: price per kWh consumed during peak hours is 0.254 €/kWh; at flat time 0.209 €/kWh; and at off-peak hours 0.185 €/kWh.

Octopus Relax: price per kWh consumed of 0.212 €/kWh.

kWh Prices (both Octopus tariffs) 

Peak hours (fixed term): €32.85.
Off-peak hours (fixed term): €6.57.

Iberdrola Special Plan

The Iberdrola Special Plan offers a 15 percent discount during the first year, and its kWh prices for both on and off-peak are competitive with other cheaper tariffs.

kWh Prices

Price per kWh consumed: €0.178662 (minus the 15 percent extra discount) but plus a gas metering cost (which in August was €0.161529/kWh.)

Peak hours (fixed term): €30.52381
Off-peak hours (fixed term): €3.512901

Endesa ‘One Luz’ Tariff 

Endesa is currently offering the ‘One Luz’ tariff, which offers a 10 percent discount on consumption and an additional 10 percent reduction throughout the first year.

kWh Prices

Price per kWh consumed: €0.189 (plus the 10 percent +10 percent discount) + the metered gas cost (which in August was €0.161529/KWh).

Peak hours (fixed term): €33.86.

Off-peak hours (fixed term): €7.9973

Total Energies

Another interesting option is Total Energies, who offer entirely personalised pricing plans. Basically, Total Energies want to attract your business by outdoing your current rate. In order to receive a quote and see how it stacks up against your current provider, you simply upload a copy of your current bill to the website and Total Energies make an offer, often bettering your current rate.

If they make an offer, Total Energies promise a discount lasting for 4 years, although the price on which the discount is fixed is only valid for 12 months.

READ MORE: 11 ways to cut costs as Spain’s electricity rates beat all-time price records

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MONEY

What’s the maximum amount you should have in a current bank account in Spain?

Most people in Spain only have one bank account and use it for all different purposes, but what happens when you manage to save up a bit? Here's the official advice on Spanish savings accounts.

What’s the maximum amount you should have in a current bank account in Spain?

Our bank accounts are used for many day-to-day activities such as paying bills, receiving paychecks and buying groceries, but is there a maximum amount of money you should have in your account at one time? And what should you do if you go over this amount?

While there isn’t an official maximum amount that you should have in your current account, the Organisation of Users and Consumers (OCU) advises that your current account only be used for certain amounts and everything over that should be put into different accounts.

According to the OCU, in your main bank account, where you receive your salary, pension or other significant payments, you should have a maximum of three months of your salary.

So for example, if you earn the minimum wage of €1,000 per month in Spain, then the maximum you should have in your current account is €3,000.

READ ALSO – Ask the expert: What are the best UK banks for Brits in Spain?

They advise that you don’t want to go too much under this amount either because you want to make sure you have accessible cash to use when you need it, as well as for possible emergencies. They also suggest checking your account balance regularly to make sure you don’t go into the red and don’t incur extra bank fees.

But equally, you don’t want to have too much in your account and keep all your savings in one place for security reasons.

Savings accounts

The OCU recommends opening a savings account or cuenta ahorro for any amounts greater than three times your salary, rather than keeping it all together in your current account.

Most banks have various types of savings accounts with different interest rates and different fixed terms where you’ll have to keep your money in for a certain amount of time.

For money you’ll need in the short term, but not right away, the OCU suggests putting it into a fixed-rate savings account (cuenta ahorro plazo fijo) for 12 months, but warn that if you need the money before the year is out then you may have to pay fines take it out.

For money that you know you won’t need in the short term, the OCU advises putting it into a long-term investment or a fixed-rate savings account for longer than one year. “For amounts that you don’t plan on touching in the next five or ten years, it’s advisable to make a little profit on it, however, keep in mind there may be seasons in which you suffer some losses too”, they said.

Savings over €100,000

For anyone that has savings over €100,000 in any type of account, it’s important to distribute the amount over various accounts warn the OCU.

This is because during an economic collapse or bank failure, you will not be covered by the EU Deposit Guarantee Fund, which is only able to guarantee the repayment of your money up to €100,000.

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