Munich, 4 November 2024 – Starting January 1, 2025, Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) will require electricity providers to offer dynamic tariffs. This initiative aims to ensure that as electricity demand rises – due to the ongoing electrification of various sectors – and as supply increasingly depends on renewable energy with fluctuating production, supply security remains stable. Private consumers are encouraged to use electricity when it is most available and therefore cheapest. But is it practical for everyone to adopt dynamic tariffs? gridX, a leading European smart energy expert, explains the considerations.
Maximizing savings with high loads
“Dynamic electricity tariffs offer households significant savings potential,” explains Christian Augustin, Team Lead for Product Management and a dynamic pricing expert at gridX. However, there are some prerequisites: for instance, current savings primarily benefit those with high-consuming systems, such as heat pumps or EV chargers, who use them regularly. This is because these systems consume large amounts of power when in operation, and shifting this consumption to low-price periods can result in substantial cost savings. However, manually adjusting operation times requires considerable effort: users must frequently check the next day’s electricity prices on the energy exchange and align them with their daily plans. “This manual control of energy consumption is highly labor-intensive and can quickly become tedious,” Augustin notes.
Smart energy management for simplified control
The gridX expert suggests ways to leverage consumption control while minimizing effort for equipment owners: “A smart home energy management system (HEMS) that intelligently automates all home energy flows can manage consumption seamlessly.” According to Augustin, households could save significantly on energy costs by using an advanced HEMS to charge their EVs or run their heat pumps during low-price periods. One such advanced HEMS, offered by the Hamburg-based, new energy company 1KOMMA5°, combines AI with its own dynamic tariff for an all-in-one package, including smart meter installation and energy supply.
“Our artificial intelligence, Heartbeat AI, fully automates the control of all connected components,” explains Julien Sander, Global Product Director at 1KOMMA5°. “This means customers no longer need to manage their consumption actively, as the system optimizes usage autonomously. For 40 percent of customers, the effective electricity cost per kWh was zero cents or less between May and August due to optimization. In these cases, income from electricity sales and negative consumption surpassed solar generation and grid consumption costs. The more household systems optimized by Heartbeat AI, the better the results.”
Active role in the energy transition
Sander highlights an additional benefit that can further improve financial returns: a HEMS can also integrate local PV generation if a rooftop solar installation is available. Using insights like weather forecasts and household routines, a HEMS can refine energy management and even maximize self-sufficiency. Moreover, dynamic rates not only offer savings but also help households contribute to grid stability. For instance, a HEMS can feed excess solar production into the grid during high-demand times. This allows households to actively stabilize the energy system and reduce their own grid dependence, lowering costs even further.
1KOMMA5° upholds a key goal: “Our mission is to maximize savings and earning opportunities for our customers while advancing the energy transition. Dynamic tariffs combined with smart meters are essential, and at 1KOMMA5°, we handle both,” Sander explains. “For households using the full potential of PV systems with batteries, EVs or heat pumps, they can significantly reduce their average electricity costs through smart control,” he adds.
Transparency: The key to control
gridX expert Christian Augustin provides two final tips for choosing a provider and contract. Firstly, it’s worth assessing a provider’s transparency in handling market prices. “Direct pass-through of market prices without additional provider fees per kilowatt-hour (kWh) is crucial, especially for high-consumption households,” says Augustin. “Switching to a provider with a dynamic tariff and low fees can be beneficial for high-consumption homeowners.” This ensures fair costs per kWh that don’t increase disproportionately with higher consumption. Secondly, Augustin advises looking for PV systems with batteries that support advanced functionality, such as charging and discharging management, at the time of purchase. “We anticipate that regulations in Germany will soon simplify access to solutions that provide tangible financial benefits for consumers,” he emphasizes.
Want to learn more about dynamic electricity prices? Read our time of use report or browse our Tariff Timer module landing page.
((Illustration: © gridX GmbH, Reprint free of charge; Image caption))
Dynamic electricity tariffs can be an effective way for households to reduce their electricity costs.
gridX is Europe's leading smart energy company based in Aachen and Munich. With its IoT platform XENON, gridX enables manufacturer-independent monitoring and management of distributed energy resources. XENON allows partners to develop and scale energy management solutions faster than ever before. By partnering with gridX, Fastned is able to install more charging points at sites without the need for costly grid extensions, and the Viessmann Group is able to offer its customers intelligent and integrated home energy management systems.
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