Today we’ll share the key points you need to read your electricity bill without getting lost along the way.
For many people, understanding an electricity bill often feels like mission impossible. But since at Holaluz we believe that the impossible only takes a little longer, we’re going to explain which electricity bill concepts appear on a bill and, above all, which concepts do not necessarily have to appear. Let’s get started:
Your details
Every bill should include your name, address, bank account and ID number. In addition, it’s important to point out that your electricity bill should always include the identification number for your home’s installation, known as the CUPS, your contracted power capacity and your grid access tariff.
The basis of your bill: power capacity and energy
This section contains the information that makes each bill unique during a specific billing period.
- Power capacity:
This is the fixed part of the bill. It is paid according to the power capacity band you have contracted, regardless of whether you have consumed electricity or not. Essentially, you pay to have access to consume as much energy as your contracted power capacity allows before the circuit breaker trips, something like the “bandwidth” of your installation.
Calculating what you pay in this section is simple: to find the amount, you only need to multiply the power capacity you have contracted (expressed in kW) by the base price (expressed in €/kW/day). Finally, multiply this result by the number of days included in the bill. That will be the “fixed” amount you pay each month.
- Energy:
This is the variable part of your bill, the amount you pay based on the electricity you have used.
To calculate this amount, you only need to multiply the amount of energy consumed during the period being billed (expressed in kWh) by the base price (expressed in €/kWh) .
Taxes: electricity tax, meter rental and VAT
- Electricity tax: This tax was originally designed to help the coal mining industry, although its current use (which is not very clearly defined) is managed by the autonomous communities. It is calculated by applying 5.11% (with some exceptions) to the sum of power capacity and energy. Some time ago there was talk of removing it, but for now there have been no updates on this.
- Meter rental: Unless you own it, the meter belongs to the distributor. That is why a rental fee is paid, with the amount set out in the BOE.
- VAT: The final tax is VAT, which is 21% (with some exceptions). Its taxable base includes all the previous concepts and, although it may sound illogical, the other two taxes as well.
- Total amount: Finally, the total amount paid on the bill is the total sum of all the previous concepts.
Other concepts
There are also other concepts that should appear on your bill, usually at the end. They are the following:
- Your readings: This section should show at least the last billed reading and the current billed reading, together with the dates on which they were taken. Ideally, it should also show the last actual reading your company received from your meter, so you can confirm that your bill is based on a correct reading.
- Charts showing the origin of the energy: These usually appear as “pie charts” and show the origin of the energy sold. In our case, they show the Spanish average on the one hand and the origin of the energy we represent on the other. At Holaluz, for example, you can see that 100% of the pie chart is green, because our electricity is 100% green, guaranteed as such by the CNMC.
- Environmental impact label: Next to this, you will find the environmental impact generated by your consumption, with A being the lowest impact (renewable energies) and G being the most polluting in terms of carbon emissions and radioactive waste .
What if other concepts appear that are not listed here?
If you find amounts on your bill for maintenance or other unknown concepts, you should check carefully what they relate to. Ask your current company or review your contract to understand why they appear.
They may be correct costs (perhaps due to a change in power capacity or tariff, for example) but they may also be add-ons such as maintenance services or similar items that are not essential and that, in most cases, only serve to unnecessarily increase the total amount of the bill.
We hope your electricity bill is now a little clearer. And if we have left anything out or you need us to clarify any point, let us know in the comments.
If you want to start saving with 100% green energy, check out our electricity tariffs.Electricity tariffs
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