High prices of basic products and services for citizens is a reason worth studying. An example is the price of the shopping cart, but there are others such as the reasons and evolution of light growth in 2023 what needs to be explained to understand why it happens and what steps need to be taken to save costs as much as possible.
Who is affected by rising electricity prices? Both electricity companies and end consumers (individuals and companies) are negatively affected when electricity prices rise and positively when they are lower. This is a reality that has two aspects: the fixed prices and indexed prices.
- On the one hand, there is fixed rates for electricity and gaswith which consumers always pay the same per kilowatt hour (kW/h) to the electricity trading company with which they signed the supply contract.
- And on the other hand, there is rates indexed to the market price, which are the ones that change every hour of every day and whose prices are set in the wholesale light market through a supply and demand process. The result is that power companies sell electricity to consumers at the same price they paid the companies that produce it.
However, as we will explain later in , it is possible to save money on bills despite a context of rising prices. One option is to choose self-consumption in homeswhich offers economic advantages to users in contexts of price fluctuations, thus gaining security and peace of mind when it comes to covering expenses and controlling the cost of energy consumption.
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Why did the price of electricity increase in 2023?
The context of the electricity price increase in 2023 must first be understood by taking into account the historical increase in 2022: in August, the price exceeded 500 euros per megawatt hour (MW/h).
Between reasons for electricity price increases in 2023 are the following, which do not include the increase in electricity demand because, according to data from January to May from Red Eléctrica, each month there was less demand from Spanish consumers: -4.1% in January, -1% in February, -2.3% in March, -7.7% in April and -4.6% in May respectively.
1.- Gas price increase
The main reason for the increase in the price of electricity is gas price increaseespecially since the beginning of the war in Ukraine in February 2022. Gas is one of the most used raw materials for the production of electricity in Spain and Europe, which is why, since the beginning of the war, policies have been implemented to be more energetic. independent.
One of them was the gas price cap, which was approved by the Spanish Government through Royal Decree 10/2022, of May 13, and which established the limit of 40 euros/MWh at the price of gas used in the production of electricity on the wholesale market. From December 2022 to March 2023, the gas ceiling increased by 5 euros per month, until it reached 55 euros/MWh.
This cover, which is part of the so-called Iberian exceptionwhich the EU approved for Spain and Portugal, was extended by Royal Decree-Law 3/2023 of March 28, which set a limit of 56.1 euros/MWh in April and a monthly increase up to 65 euros /MWh in December 2023.
2.- Increasing the cost of CO2 emission rights
Secondly, we can mention increasing the cost of CO2 emission rights (carbon dioxide). What does it consist of? The European Union (EU) has implemented a system that requires the payment of CO2 emissions generated by fossil fuels used by thermal power plants, refineries or cogeneration plants in their electricity generation processes.
For this reason, as the distribution of CO2 emission rights is smaller, prices rise, which increase is reflected in the bills paid by consumers.
How to save on the bill in times of rising electricity prices?
The increase in the price of electricity ends up affecting all consumers in one way or another, regardless of whether they have fixed or indexed prices. For this reason, it is necessary to think about saving measures beyond those taken by Public Administrations, such as the gas price ceiling mentioned above.
In countries like Spain, renewable energies (wind, hydro or solar, to mention three of those that have the largest share in energy production) are a viable alternative to save on electricity bills and achieve a higher energy independence for residents.
For this reason, in the following sections we want to talk about the advantages of solar self-consumption to save on bills and have more energy independence with self-consumption.
Cheaper bills from day one
In a context of rising prices, the installation of solar panels in homes, energy communities and also in companies has very clear economic benefits: for starters, bills are cheapersolar panels are obtained from the first day of operation savings of up to 40% every month.
Therefore, they are a clear advantage over consumers who do not have solar panels for self-consumption of energy. With these devices, both individual and shared, users\’ energy consumption levels are managed more effectively and increase efficiency and responsible consumption.
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Financial Aid and Tax Deductions
Promoting the energy transition towards a green and sustainable model that replaces fossil fuels (coal, oil and gas) includes European and national measures such as financial aid and tax deductions for solar self-consumption users.
These aids include EU Next Generation funds administered by the Autonomous Communities (can be applied for until December 31, 2023), income tax deductions regionally and tax deductions such as IBI or ICIOwhich vary in amounts and years according to the fiscal regulations approved by each city council.
Energy independence due to self-consumption
Finally, it is necessary to emphasize that solar self-consumption allows users to have more energy independence. By generating autonomous energy through solar photovoltaic panels, they are less dependent on electricity and gas companies to have energy for daily consumption in homes and businesses.
Energy autonomy is increasing, as we have explained in other articles, because the energy that is consumed is produced autonomously, but also because the current legislation includes more cases where the surplus of unconsumed solar energy can be sold.
In conclusion: in a context where there are more reasons that explain the increase in the price of electricity in 2023, there are alternatives to save money and gain energy autonomy. Installing solar panels for solar self-consumption in homes and businesses is one of them, so users can have lower energy costs and be more independent.
