More clarity through FAQs on energy price caps

Since mid-December, consumers and businesses have gained a bit more clarity amid the technical jargon surrounding the energy price caps. The Federal Ministry for Economic Affairs and Climate Action (BMWK) has published a series of easy-to-understand FAQs online regarding the energy price caps adopted in mid-December.

Background

Due to inflation and rising prices in the energy sector, many businesses and consumers have found themselves in financial distress or at risk of facing serious financial difficulties. That is why lawmakers had launched aid programs such as energy price allowances and the December emergency aid. Now, with the laws on gas/heat and electricity price caps, two additional measures have been adopted for 2023 and 2024, which include an option to extend them until the end of April. These regulations, set forth in the Act on the Introduction of Price Caps for Piped Natural Gas and Heat and the Act on the Introduction of an Electricity Price Cap, as well as amendments to other provisions, are complex and can be extremely difficult for laypeople to understand.

Topics

With the newly published FAQs, the BMWK sheds light on the matter and provides clear explanations for questions on the following topics:

• Gas and Heating Price Cap: The BMWK explains the gas price cap in a total of 26 questions and answers, addressing key application issues and providing calculation examples.
• Electricity price cap: The mechanism is clearly explained in detail, including through calculation examples.
• Skimming of windfall profits: The FAQs clarify how the skimming of windfall profits works.

Overall, the BMWK’s FAQs provide a good explanation, and every consumer is advised to use them as a guide when taking advantage of the energy price brakes and to check regularly for updates.

Concrete assistance provided by the energy price cap

Gas

Households and small and medium-sized enterprises can purchase 80% of their projected gas consumption (similar to the previous year’s consumption) at a gross unit price of 12 cents/kWh. The government covers the difference between this “cap” and the actual price charged by providers.

Electricity

The so-called electricity price cap works in the same way as the gas price cap. Here, 80% of the projected annual consumption is capped at a gross unit price of 40 cents/kWh.

For large-scale consumers, such as large manufacturing companies, the subsidy criteria differ. In this case, it is advisable to consult with your tax advisor or energy provider.

Tax Advisors in Düsseldorf & Oberhausen

For all questions regarding tax matters, the experienced team at our firm in Düsseldorf and Oberhausen is always happy to assist you. Contact us to schedule a consultation.