Electricity tariffs in Spain: How to choose the right one for your home

@tanerardali
@tanerardali
7 October 2019, Redaction

All homes need to make use of electricity and therefore have to contract their supply. However, not all homes have the same consumption habits and needs may vary depending on several factors. The Barcelona City Council has created a guide to help citizens choose their electricity rate according to their schedule or the power they need for their day to day.

As explained by the Specialist Coordinator in Energy Rights, Raquel Rodríguez, the first thing to assess is the electrical power that you want to hire. This is directly related to the power of electrical equipment in the home, and if we use it all simultaneously, rather than the surface area of the home. In other words, the consumption does not depend so much on whether it is a small or large apartment, but on the amount of household appliances that are used simultaneously in the home.

Secondly, the option of contracting a rate with hourly discrimination must be assessed. “This rate is interesting because it offers two different prices based on two defined time periods,” explains Rodríguez.

Finally, it must be taken into account that electricity can be contracted from free market or regulated market marketers. In the case of contracting with the latter, there is the option of accessing discounted rates.

Contracting the electricity power we need

One of the objectives of choosing the electric tariff that we hire is to avoid overpaying the supply bill. Therefore, "we must ensure that we have the electricity bill adjusted to the needs of our home," explains Rodríguez.

In this respecy, we must ensure that we have contracted the electrical power we need for electrical equipment used at home, since sometimes the contracted power is higher than what is actually use, which implies an unnecessary extra cost.

To pay less, it is advisable to optimise the use of existing electrical equipment to use them when necessary and rationally. If simultaneous use of different electrical equipment is avoided, an electric power lower than our rate may be contracted because there will be no need to use all the equipment at the same time.

The maximum power that can be used simultaneously

All electrical equipment has an assigned electrical power (small or large) that is expressed in Watts (W) or kilowatts (kW). If we use several devices simultaneously, the electrical power of each adds up, until we reach a point where we can no longer use more equipment at a time so that this sum exceeds the electrical power we have contracted. This is the maximum power that can be consumed simultaneously.

When the maximum power is exceeded, the new digital meters disconnect the service and the home runs out of electricity supply. The most economical and efficient way to use electric energy is to have a low contracted power, as this will optimise the use of the equipment and reduce the fixed cost of the electricity bill.

When is it considered necessary to have a high electrical power?

For most households, it may be sufficient to hire between 3.45 or 4.5 kW of power. When the decision is made to hire a high electrical power it is because there is a large number of electrical equipment that need to operate at the same time.

It may be the case for homes that have everything by electricity and not gas; apartments with a lift, heated pool or homes that have air conditioning ducts. In these cases you can opt for a power that exceeds 10 kW, which can only be hired in the free market.

The hourly discrimination tariff

Another effective way to find rates that fit our energy usage is to hire the hourly discrimination rate. By contracting this rate the benefit is greater when the use of electrical equipment is increased during the difference between lower and higher usage hours, and its use is reduced during the hours in which the price is higher.

With an hourly discrimination rate, during this period of difference the price of energy presents a 42% discount with respect to the regulated price, and during the peak period, the price increases by 21%. “If you move, as far as possible, the use of the most powerful electrical equipment, such as the washing machine or the iron towards the hours of the difference period, we will be using energy in the hours that the price is lower, so we can obtain savings in the invoice of up to 30% ”, explains Rodríguez.

Free or regulated market

The Energy Rights Specialist Coordinator recalls that in the case of being able to access discounted rates, it is interesting to contract the supply with a regulated market marketer to be able to have the social bond rate with discounts of between 25 and 40% in the bill.

If, on the other hand, we have the electricity supply contracted with a free market marketer, we must know how to identify if we have extra maintenance services added to the bill. Sometimes it is the case that people do not know that they have contracted maintenance services with their bill, they do not use them and this implies an unnecessary expense.

Combined tariffs for different supplies

The free market marketers are the only ones that have invoices combined with different supplies, and that may also include maintenance services. They offer different rates and specific products so that users can choose the one they think is most convenient. Therefore, you can find specific rates that can offer discounts for the hours when you most use electrical equipment.

But as the expert in energy rights warns, the rate that can be more affordable when analysed over long periods of time is the one offered by the Marketers of the Regulated Market (PVPC for electricity and TUR for gas), and these rates do not allow combined invoices.

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