You will notice this on your electricity bill.

The rise in electricity prices by almost 85% in June last year reactivated the anti-crisis measure cancelled in March of the same year. Thus, In July this year, VAT on electricity bills will be reduced again to 10%.

At the end of June, the average monthly price of electricity exceeded 45 euros per megawatt hour (MWh). In particular, the daily price on the Spanish wholesale market (the “pool”) closed the sixth month of the year at 56.08 euros per megawatt hour (MWh), 84.47% higher than in May, when it was 30.40 euros/MWh, according to the ASE Group Data. For this reason, VAT returns to 10% of the electricity bill, starting in July.

The VAT refund of up to 10% is implemented as a result of the application of Royal Decree-Law 8/2023, which includes measures to mitigate the impact of the increase in electricity prices on consumers’ bills.

This decree states that If the price of electricity exceeds 45 EUR MWh for the entire month, the VAT on electricity applicable from the following month is 10%.

After four months of VAT at 21%, a result of low electricity prices since March, there is a return to the reduced rate of 10% on electricity bills.

Firstly, because of the greater demand for energy with the onset of hot and good weather. In addition, there are no gusts of wind and rain, which reduced electricity prices in April and May. Internationally, there has also been an increase in prices on the gas market and CO2 emission rights.

However, the price of electricity is falling and is cheaper than a year ago (39% lower than a year ago and the average for June over the past five years), although in the first days of June there was a specific increase taking into account the summer.

Historically, there are always 3-4 months a year when the price of electricity increases slightly due to more extreme temperatures and increased consumption itself.. For this reason, according to experts from Gana Energía, the price of electricity should always be read in annual terms and not to lose calm because of specific increases. Since the beginning of the year, the price of electricity has been falling month after month.

It is worth remembering that in April and May there were hours with a price of zero euros and, for the first time on the Spanish market, hours with a negative price. Since February, the price of MWh has been set below 45 euros.

In the current situation, according to Gana Energía experts, the best option for saving is still the market price tariff, which reflects in real time what is happening in the electricity pool on the account.

For this reason, they estimate that compared to a fixed-price customer, an indexed-rate customer will achieve greater savings over the course of a year, even though there will be certain times when the price increases.