Taxes, time bands, tolls, set fees, and power and consumption charges—here’s everything you need to know about the new Spanish electricity bills.
6 min read
Getting your head around the new Spanish electricity bills can feel a bit like filing your tax return with a blindfoldon. And if that wasn’t enough, the introduction of the variable rate system—electricity rates that vary according to the time of day—further complicates things. But don’t worry—if you want to decipher your electricity bill without any fuss, you’ve come to the right place.
Electricity bills—a breakdown
When we pay our electricity bills, we’re actually paying for several items that are tied to our energy consumption. These include the contracted power, taxes, and even the electricity meter hire fee. Here’s a breakdown of these costs in detail:
Electricity meter hire fee. If you don’t own an electricity meter, this charge will appear on your bill. In fact, your retailer is obligated to charge you for using the meter since it belongs to the distributor. Hire fees for digital meters vary between €0.81 and €1.36 per month.
Consumption charge. This is the cost for the amount of energy you’ve actually used, measured in kilowatts per hour (kWh). To calculate this, multiply the price per kilowatt by the number of kilowatts you’ve consumed. If you use a company in the free market, you’ll pay either a fixed rate or a two- or three-level variable rate. However, if you use a company on the regulated market, you’ll be subject to a three-level rate system—peak, standard, and off-peak.
Power charge. This is a general, fixed charge for the contracted power, which you’ll need to pay whether you consume electricity or not. With the arrival of the new electricity bills in Spain, it’s possible to register one contracted power for your home and another for your business.
Taxes. Both free-market-company and regulated-market-company customers have to pay tax to Hacienda. The tax you’re charged on your electricity is 5.113% of the total of the power and consumption charge, and you’ll need to pay it regardless of whether you use any electricity. Plus, you’ll need to add 21% VAT if you’re in mainland Spain or the Balearic Islands, 7% if you’re in the Canary Islands, and 1% if you’re in Ceuta or Melilla.
Tolls. These make up a significant chunk of the electricity bill. They include transport and distribution costs, as well as other indirect costs related to the supply of electricity.
Retailer markups. This is your payment to your electricity supply company for the services you’ve used (for example, to cover the purchase of energy on the market for consumption, costs involved with changes to your power level, and billing costs).
Fixed costs. These are made up of transport and distribution network costs, investments in renewable energy, the higher production costs in non-mainland Spain, and annual payments to recover any shortfall in payments. These costs are part of what are now called the access tariff or toll.
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With the introduction of the new electricity rates, all customers with power levels of up to 15 kW will pay the same fixed costs to cover their use of the electricity grid. The rate for all domestic regulated-market consumers includes several time bands. Free-market electricity companies will still be able to offer a huge variety of rates, with discounts at certain times or different prices for every hour of the day.Variable electricity rates—or night rates—are a type of electricity charge that sets three different prices for the kilowatts per hour you use at different times of the day. You can find companies that offer this kind of system in both the free market and the regulated market.If you want to receive the Spanish Electricity Rates Subsidy (Bono Social de Luz) to reduce your electricity bills, your contract has to include the voluntary small consumer rate (PVPC—Precio Voluntario para el Pequeño Consumidor), available in the regulated electricity market. Prices are set by the Spanish Ministry for Industry, Business, and Tourism.
A guide to your new Spanish electricity bill
Off-peak hours
12 a.m. to 8 a.m. weekdays, and all day on weekends and bank holidays
Standard hours
8 a.m. to 10 a.m., 2 p.m. to 6 p.m., and 10 p.m. to 12 a.m.
Peak hours
10 a.m. to 2 p.m. and 6 p.m. to 10 p.m
Understanding your Spanish electricity bill
Since the electricity market was deregulated, customers in Spain can choose from almost 100 electricity retailers. The deregulation process isn’t yet complete, meaning some electric companies are part of the regulated market, while others are part of the free market. These markets share two of the elements that comprise your total electricity bill—the tolls set by the government, and taxes—including tax on electricity and VAT. Their electricity production fees are the main difference between them. Your electricity bill contains the several costs or items that you’ll have to pay for to use electricity during a certain billing period. When you’re scanning your electricity bill, you may feel overwhelmed by the mass of figures, charts, and information it contains. So let’s shine light on your electricity bills by clarifying some terminology:
Billing details. This is the first piece of information you’ll see on your bill. It includes the name of your electricity company—this will also tell you if you’re in the free or the regulated market—as well as the bill number, the bill reference or code, the billing date, and the billing period.
Bill summary. This is the amount of money you’re charged for the contracted power and the amount of energy you’ve actually consumed, as well as taxes, additional services like hire fees for your electricity meter, and any monitoring devices or other items.
Information on electricity consumption. This section offers you information about your current electricity consumption, as well as your consumption last month or in the previous billing period. It also tells you if it’s an estimated reading—which will be the case if you can’t take meter readings—or an actual reading, which have become more common since the introduction of smart meters.
Contract information.In this important section you’ll find information such as the name of the contract holder, their tax identification number, and their CUPS number (an alphanumeric code for identifying houses and businesses), as well as the meter number, the rate type of rate, the contracted power, the contract reference number, the address the electricity is supplied to, the name of the retailer and the distributor, the contract end date, and the access tariff or toll.
Bill details. This section details all the items you pay each month, including contracted power, energy consumed, rent, taxes, and the tolls, as well as the total bill amount.
Information for the consumer. The final section of your bill contains information on contracted services and other contract options. It also has information on the rates subsidy for vulnerable people and a link to the website of the Spanish National Commission on Markets and Competition (CNMC), where you can find offers from other retailers. At the bottom of the bill, you’ll also find information concerning where the energy you’ve consumed came from, as well as its environmental impact.
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Did you know that you can pay any bill using your N26 bank account and manage all your costs in one place? Plus, your balance is updated in real time, so you’ll always know whether you’ve got enough funds in your account to cover your electricity payment.And, moving your direct debits to N26 is simple. Just tap Make N26 my main account in your N26 app and enter the details of your other bank account. Want to learn more? We’ll tell you everything you need to know to switch your bank account. So sign up now to enjoy better, smarter banking right away.
FAQs
On June 1, 2020, the Spanish Ministry for Climate Transition and Demographic Challenges brought the new electricity rate into effect. This means that charges and tolls remain separate and that all domestic tariffs (below 15 kW) are now under the 2.0TD rate system—divided into peak rate (P1), standard rate (P2) and off-peak rate (P3).
In the new electricity bills, electricity costs vary according to the time of day. Off-peak hours are the cheapest (midnight to 8:00 a.m. weekdays, and all day on weekends and bank holidays), the standard rate the next cheapest (8 a.m. to 10 a.m., 2 p.m. to 6 p.m. and 10 p.m. to midnight), and peak rate, the most expensive (10 a.m. to 2 p.m. and 6 p.m. to 10 p.m.).
With the new European rules now in place, the access tariffs are now divided into tolls and charges.Tolls are set by the CNMC. They cover transport network costs and distribution costs. The charges are set by the Spanish Ministry for the Ecological Transition and the Demographic Challenge to cover all the other fixed costs, like funding for renewables, the additional costs of energy production in non-mainland areas, and the annual costs of the deficit.If you have the voluntary small consumer rate and you’ve received a bill with the new model, you won’t be able to decipher how much you’re paying per kWh in each time band. This is because the new bill model doesn’t contain a breakdown of the energy production costs.
Two types of tax are applied to your electricity bill. The first is VAT, which is 21% if you’re in mainland Spain or the Balearic Islands, 7% you’re in the Canary Islands (IGIC), and 1% if you’re in Ceuta or Melilla (IPSI). In addition, there’s the special electricity tax, which is 5.113% the power and consumption charge total. You’ll have to pay this whether or not you use any electricity. There is also a 7% tax on electricity production, which is passed on to the centers that produce the energy. However, this tax has currently been suspended by the government to mitigate against effects of the increase in electricity costs. It is not clear to what extent this tax affects customers.
