Long-term Loans – Fixed Payments

Long term loan – Payment for electricity

Long term loan - Payment for electricity

Bonus payments There are electricity providers who grant new customers a bonus. This is usually paid out after the first year of the contract or offset against the first annual statement. Since a bonus payment usually only occurs once, the electricity costs decrease in the first year after a provider change. If a bonus is paid, the electricity price is usually higher in the second delivery year. Some bonus payments are linked by the electricity provider to a minimum contract period or a certain power consumption. The bonus is either a flat rate or a percentage.

Price Guarantee Some rates include a price guarantee or limited price guarantee. In the case of a price guarantee, the electricity supplier insures the entire electricity price, or price components of the electricity price that he himself can determine, in a certain period of time. Price components such as taxes or duties, which the state decides, are partially not covered by the price guarantee. If taxes and charges are not covered by the price guarantee, electricity providers usually speak of a limited price guarantee.

Free kWh For some electricity tariffs, consumers receive a certain amount of free kilowatt hours (kWh). Depending on the tariff these free kWh can be subject to conditions. For example, it is possible for electricity customers to receive the free kWh only if they meet a minimum contract duration or a minimum consumption. Free kWh can be offset in the annual bill. If there is only one-off free kWh for new customers, then they are equal to a bonus payment, which lowers the electricity costs in the first year.

Method of payment Electricity is paid in installments or in advance, depending on the tariff. Advance payments are made in the rules monthly. When paying in advance consumers pay their electricity in advance. Depending on the advance payment rate, the advance payment can be made for three months, six months or a whole year. Electricity rates with half-yearly or annual payment are often cheaper than rates with monthly payments. The latter has the advantage for consumers that they do not have to pay a large amount in advance and can hardly lose money in the event of bankruptcy of their electricity provider.

Minimum Term A contract can not be terminated during the minimum contract term, unless the electricity supplier increases the electricity prices. In this case, consumers have a special right of termination. This allows you to dissolve the contract prematurely. Without an electricity price increase, customers must comply with the minimum term and notice periods.

Costs in the 2nd year The electricity costs and the savings in the electricity calculator refer to the first year. It may be that the costs in the second year of the contract are higher than in the first year. New customer bonuses are usually only available for the first year, even free kWh or various action bonus programs can change in the second year of the contract or they can disappear altogether. For this reason, some electricity providers in the second year must expect different costs than in the first year of supply.

HT / NT tariffs Many households that heat with electricity or that used to be heated by electricity once have an electricity meter with two counters or two electricity meters. One of them gives the high tariff (HT), the other the low tariff (NT). At night you can switch to the cheaper low tariff. HT / NT fares are often offered only by local utility companies and few other utilities. Anyone who has a HT / NT meter, and wants to keep such, should be informed before a change of electricity supplier, whether an alternative electricity supplier offers such a tariff, or whether a switch to a electricity supplier with a uniform tariff is cheaper.

Packet fares At normal electricity tariffs, consumers pay a basic charge and their consumption of kilowatt hours (kWh). In the case of packet tariffs, electricity customers pay for a certain number of kWh, for example 4,000 kWh for a 4-person household. For the amount of kWh they pay a fixed package price, which can be significantly cheaper than comparable electricity tariffs. If the entire package is not consumed, then the full package price still has to be paid. If more electricity is required than provided in the package, then the consumer may have to pay significantly higher amounts per kWh for the additional consumption. Parcel rates are therefore suitable for customers who know their power consumption very well or can estimate.

Reduced / multi-consumption tariffs Similar to package tariffs, electricity customers estimate their electricity consumption at reduced and more-consumption tariffs. If the consumption deviates strongly from the estimate, for example by 20 percent, the working price for the total electricity consumption may change. Fares for which a premium must be paid if consumption deviates significantly from the estimate are only appropriate for consumers who can reasonably predict their electricity consumption.