Dynamic electricity tariffs explained

How a dynamic tariff works

With a normal tariff, you pay the same unit price (Arbeitspreis) for every kilowatt hour. With a dynamic tariff, the unit price is linked to the wholesale price on the power exchange, usually the day-ahead market. There, electricity for tomorrow is traded today. Prices there now change every 15 minutes.

The prices for the next day are usually fixed by midday the day before. Many suppliers show them in an app or on their website. This lets you plan when to charge your electric car or start the washing machine, for example.

Only the exchange price changes. Network charges (Netzentgelte), taxes, levies and surcharges stay fixed and usually make up the largest part of the unit price. On top of this, there is a monthly standing charge (Grundpreis) and often a supplier mark-up per kilowatt hour. That is why electricity still costs money even when the exchange price is negative.

According to the consumer advice centre (Verbraucherzentrale), tariffs that vary monthly and only use a monthly average of the exchange price are not dynamic tariffs in the legal sense. They do not need a smart meter system, but they also give you no reason to move your consumption.

Duty to offer and requirements

Since 1 January 2025, every electricity supplier must offer its customers who have a smart meter system (intelligentes Messsystem) a contract with a dynamic tariff (§ 41a Abs. 2 EnWG). Before that, this only applied to large suppliers. Before you sign, the supplier must inform you about the costs, advantages, disadvantages and risks.

You need a smart meter system, which is a digital meter with a smart meter gateway (Smart-Meter-Gateway). A digital meter alone is not enough. Since 2025, you can ask the metering point operator (Messstellenbetreiber) to install one. In principle, this must happen within four months.

Important: switching to a dynamic tariff usually does not give you a special termination right (Sonderkündigungsrecht) for your current contract. First check the contract term and notice period.

How the exchange price behaves

On working days, electricity on the exchange is often most expensive in the morning around 8 am and in the evening around 6 pm. At midday and at night, it is usually cheaper. On sunny days, there is often a price low at midday. Little wind and sun push prices up; a lot of electricity from renewable energy brings them down.

According to the Bundesnetzagentur, the average day-ahead price in 2025 was €89.32 per megawatt hour, which is about 8.9 ct/kWh without other price components. The price was negative in 573 hours. In 40 hours, it was above €300 per megawatt hour, which is above 30 ct/kWh.

You can look at past prices on the Bundesnetzagentur's SMARD platform. They show how much prices change, but they do not allow a reliable statement about the future.

Opportunities and risks

Opportunities

Low unit price at times with a lot of wind and solar power
Savings if you move a lot of your consumption to cheap times
Often short contract terms, usually with monthly notice
A better overview of your own consumption through the app and smart meter

Risks

You carry the full price risk
High prices when there is little wind and sun, often in the evening
Costs are hard to plan; every month can look different
Costs for the smart meter system
Tariffs are complex and hard to compare

Who a dynamic tariff can suit

What matters is how much electricity use you can move to other times. The Verbraucherzentrale sees dynamic tariffs as useful mainly for households with high, flexible consumption.

01

Electric car

Charging at home uses a lot of electricity and can often be moved to cheap hours, for example at night or at midday. Many wallboxes and vehicles can charge on a timer.

02

Heat pump

A heat pump can move part of its operation, especially with a buffer tank (Pufferspeicher) or in a well-insulated house. On very cold days, there is less room to do this.

03

Battery storage

A home battery can take in electricity at cheap times and release it later. Whether this pays off depends on the battery, the tariff and your solar PV system (Photovoltaikanlage).

04

Household without large appliances

If your consumption is low and hard to move, the potential savings are small. In the view of the Verbraucherzentrale, the risk of rising prices is then usually greater than the benefit.

Worked example: charging an electric car at home

The example only shows how to calculate. It is not a forecast and not a guarantee. Your actual prices depend on the supplier, the network area and the exchange.

Assumption	Value
Charging electricity per year	2,000 kWh
Exchange price during charging times	on average 5 ct/kWh lower than when charging straight away (assumed)
Saving on the exchange price share	2,000 kWh × 5 ct/kWh = €100 without VAT (Umsatzsteuer)
Costs for the smart meter system	under the MsbG, usually €30 to €50 a year depending on the case; if installed at your request, possibly additional fees
Result	A benefit is possible if you move your consumption consistently. Expensive months can cancel it out.

Simplified example with assumed values. You also need to compare the standing charge and the supplier mark-up of your tariff with your current contract.

Time-variable network charges under § 14a (Module 3)

If you run a controllable consumption device (steuerbare Verbrauchseinrichtung), such as a heat pump or a private wallbox with more than 4.2 kW, you get a reduced network charge. In return, the network operator (Netzbetreiber) may temporarily limit the electricity these devices draw to 4.2 kW if there is a risk of overload. The rest of your household electricity is not affected.

There are three modules. Module 1 is a flat-rate reduction per year. Module 2 reduces the unit price of the network charge by 60% and needs a separate meter. Since April 2025, there has been Module 3: a time-variable network charge with a high tariff, a standard tariff and a low tariff at fixed times. Module 3 can only be chosen together with Module 1 and requires a smart meter system.

The time-variable network charge is something different from a dynamic tariff. It concerns the network share, not the exchange price, and applies regardless of the supply contract. Whether and how your supplier passes on the reduction depends on your contract.

Checklist before you sign

Check how much consumption you can realistically move.
Compare the standing charge and the supplier mark-up per kWh.
Find out whether you already have a smart meter system or when it will be installed.
Check how and when you can see the prices for the next day.
Choose a short contract term. The consumer advice centres advise against contracts with a 12-month term.
Check combined offers with battery storage, solar PV or energy management especially carefully.
Plan a reserve for months with high prices.
Note the notice period of your current contract.

Frequently asked questions

Do I need a smart meter for a dynamic tariff?

Yes. You need a smart meter system that records your consumption every 15 minutes. A digital meter without a smart meter gateway is not enough.

Can my electricity price become negative?

The exchange price can be negative, but your total price hardly ever. Network charges, taxes, levies and surcharges still apply. The Verbraucherzentrale points out that advertising with negative electricity prices leaves out these fixed price components.

How are dynamic tariffs billed?

Often monthly, based on your actual consumption. There are often no fixed monthly instalments, so costs change from month to month.

Can I go back to a fixed-price tariff at any time?

This depends on your contract. Many dynamic tariffs can be cancelled monthly. However, in principle a supplier does not have to allow an early change of tariff. So check for a short contract term before you sign.

What is the difference from an HT/NT tariff?

With an HT/NT tariff, there are two fixed prices for fixed time windows, for example a cheaper night-time price. With a dynamic tariff, the price follows the exchange and is set anew every day.

Sources

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Dynamic electricity tariffs: opportunities and risks