[https://www.dw.com/en/german-government-seeks-electricity-price-cap-in-january/a-63619836](https://www.dw.com/en/german-government-seeks-electricity-price-cap-in-january/a-63619836)
Hello, I am trying my best to understand how this announced 200bn eur subsidy works for individuals. (cap of 40ct/kwh) I am not getting a clear explanation. Can someone explain me this like I am 5 (ELI5)
**Status Quo.**
Current electricity contract with SWM – 24ct/kwh – 1200KWH/year consumption
Flexible/2 week notice period
**Scenario 1:**
I stay with SWM who is raising the price to 62ct/KWH
**Scenario 2:**
I move to Vatttenfall who is offering 49ct/kwh for a 12 month contract
Which scenario is beneficial for me in the long term?
Thank you in advance.
1 comment
Basic is:
There will be a price cap installed starting in march (but also eorking retrospective from january.)
80% of your power consumption (calculation based on your consumption of 2023) is capped at 40ct/kwh.
So you have to pay the full price for everything used above the 80% .
So for 80% of your 2022 power consumption you only pay 40ct/kwh.
There is a similar cap for gas usage but with other costs.
Also for 80% of your usage as of 2022.
For your sutiation if you wanna change supplier, both options are a risk. If the situation gets worse both are gonna raise their prices.