The electricity bill is one of the most hated expenses for Spaniards, and with good reason: we've had years of continuous price increases . Some media outlets have reported that it represents 40% of the income for many households with at least one unemployed member.
And it is that knowing when electricity is cheaper, is no longer a thrifty obsession, but a necessity, regardless of the amount of money that enters your bank account each month, or the amount that you do not enter.
In this article we will try to help you discover when electricity is cheapest , but also understand why it is so difficult to know, so much so that, sometimes, even the technicians of the different electricity companies do not know for sure.
The challenge of understanding the electricity bill
It doesn't matter if your electricity contract is with Iberdrola, Endesa, or any other company: understanding your electricity bill is a challenge. So, if your bill arrives at home and you don't understand it, it's not your problem alone; we all have it.
Understanding the electricity bill is key to later understanding how the price is calculated, and when the electricity is cheapest.
Okay, let's get to it.
We recommend that you have your invoice and compare or underline the information we mentioned to make it much easier for you.
- General data
Data of the contract holder, such as name, DNI or NIE address, contract number, invoice number, billing period, etc.
- Rate type of your contract
By the name of the company you will be able to know the type of rate that you have in force in your contract, if it does not tell you later: Voluntary Price for Small Consumer (PVPC) or free market. PVPC is offered by: Hidrocantábrico EnergÃa Último Recurso, Iberdrola Comercialización de Último Recurso SAU, Endesa EnergÃa XXI SLU, Unión Fenosa Metra SL and E.ON Comercializadora de Último Recurso.
- Invoice summary
You will see a small summary of how the total of your electricity bill was calculated. You will see a small breakdown of how it has been billed, seeing your consumption, the price per kilowatt and other elements.
- Electricity consumption report
You will now see a complete breakdown of your consumption, rates, commissions, contracted services, a consumption history, in which some companies calculate your daily consumption in the form of money. You can compare the consumption of the current exercise with the same of the previous year.
- Contract details
Here you will see well all the data of your contract, such as, for example, knowing if you have the fixed rate, by hourly discrimination, the telephone number for technical service, or if you already have the 'smart' meter (yes, in quotation marks), the number of CUPS to see your consumption on the internet in real time.
- Other data
The other data that appears is merely informative, such as the consumption graph, company notices, advertising, or whatever the company deems appropriate.
How your invoice is calculated
First, you should check your bill for your contracted power and billing plan or tariff. Your contracted power , which is the number of kilowatts you've contracted with your provider, is similar to the data allowance on your mobile phone. This determines how many appliances you can run at home. The power can be 3300W, 4400W, 5500W, or 8000W.
The calculation of the price of your electric power is calculated by multiplying:
- The contracted power (in kW)
- Period, monthly, bimonthly or daily, it depends on your company
- Government Canon
The canon is what the government controls to raise or lower the price of the electricity bill, although companies can also apply offers in this area to make their rates more attractive.
In addition to that, a variable tariff is paid , which is the payment for the energy consumed, or called billed energy, and is calculated by multiplying:
- The energy consumed in the billing period (kW per hour)
- Kilowatt hour price
You will add these two amounts, and you will add fees such as equipment rental, 21% VAT and 5% Electricity Tax.
How is the variable part of the invoice calculated?
Starting in October of last year, the price per kilowatt-hour changed, and it no longer works as before, when an electricity auction was held every quarter, and that auction was used to calculate the tariff. Now, the kilowatt-hour tariff is determined in a wholesale market with a price per hour, and only one day in advance. This means there will be 24 different kilowatt-hour tariffs instead of just one.
Does it affect you? If you have a regulated rate, the one previously called TUR, now PVCP, yes, because you will have to pay attention to the price per kilowatt hour. If you are in the free market, no, but you will lose the reference to whether you pay a lot or a little.
To fix, with this new method, the price, an estimate is made of the amount of electricity that will be consumed the next day
A forecast is made of how much electricity will be consumed in each of the hours of the next day. The price is covered under an auction, and the price changes according to the hour, that is, if there is an hour with more consumption, there will be more bids, and its price will be higher, than that of an hour with little consumption, which will be cheaper.
For all this, the 'smart' meter is key , which measures consumption per hour, but if they don't have one, companies apply a standard consumption profile, and it won't matter what you consume at any given time, as is the case in most households in Spain.
When is light cheaper
Having already understood the bill and how electricity is calculated, we have to talk about when electricity is cheapest.
The best way, if you have a time-of-use tariff, is to go to the website of the Spanish Electricity Network , where they publish the prices per kilowatt for the following day, starting at 20:30 p.m.
Normally, these are the key hours you should know, although they vary depending on whether it is a vacation period, or a weekend:
- The most expensive time is from 21:22 p.m. to XNUMX:XNUMX p.m.
- The optimal time is 7 to 8 hours
- The cheapest hour is 2 to 3 hours
For example, at the time of writing this article, the consumption of each of the previous hours is:
- The most expensive hour costs € 0,11 per kilowatt
- The optimal hour is priced at € 0,09 kWh
- The cheapest hour costs € 0,08 kWh
Thus, you can program the switching on of the appliances that consume the most in your home, such as the washing machine, the ceramic hob, in winter, the heating, or in summer the air conditioning, etc.
Although in general, morning and night hours are the most expensive , the cheapest hours are the early morning hours, starting from two in the morning.
There will be days when the most expensive hour is even more than double the cheapest hour, especially in summer and winter.
If you have the time and patience to schedule your consumption on a daily basis, this system is convenient for you, since you will see the consumption of the bill reduced, which, in this case, is no longer bimonthly, but monthly.
The main disadvantage is that you will not be able to know for sure if the calculation of your invoice is correct or not. It is the same method that we have told you before, but calculated for each hour of each invoiced period, that is, 1440 calculations in a bimonthly invoice. A real madness that not even Excel can free you from.
The best solution: a tariff with hourly discrimination
If you want to save money and forget about planning every schedule in your home, the best solution is a time-of-use electricity tariff.
It means dividing the day into two periods, that is, peak hours (daytime), and off-peak hours (nighttime).
Although it has also changed, the method is almost identical to the one before October 2015: the off-peak hour rate is much lower than the peak hour rate, and it depends on each company. Normally the off-peak rate is 50% cheaper than in peak hours.
Off-peak hours go from 23pm to 13pm in summer, and from 22pm to 12pm in winter.
Peak hours are from 13:23 p.m. to 12:22 p.m. in summer, and from XNUMX:XNUMX p.m. to XNUMX:XNUMX p.m. in winter.
Of course, off-peak hours will not always be cheaper than peak hours, but in general, this is the case.
With hourly discrimination, it eliminates uncertainty, and it is only convenient if your consumption is approximately 30% higher, at least, at night than daily, and that daytime consumption can be controlled to the maximum.
If you are unable to control your consumption , it is best to remain on the standard tariff and check your consumption daily to determine the best time to turn on the washing machine, air conditioning, or heating.
To know when electricity is cheapest, in short, it is necessary to know what rate you have contracted, what billing method, and check the price per kilowatt hour daily, although it will always be at dawn.
We hope that, with all this guide, you will have less fear when the next bill for your electricity consumption comes home, and that it will be much lower than the previous period. If you have any doubts, we recommend you compare with other companies, rates or forms of consumption, contrary to what is thought, there are many offers and rates.