Prepaid electricity

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Prepaid electricity ( English prepaid for "prepaid" ) is an alternative form of electricity purchase by consumers. In contrast to the normal electricity contract, in which the customer pays his electricity price via monthly discounts and an annual bill, in a prepaid electricity contract, the energy is purchased by the customer in variable quantities and paid for in advance. In order to receive prepaid electricity, the customer must have a prepayment meter . The counter is by the power company associated meter operator provided.

Basic functionality

The functionality of prepaid electricity is comparable to prepaid cell phone tariffs or prepaid credit cards . In order to receive prepaid electricity, the customer concludes a contract with the electricity supplier for the supply of prepaid electricity.

In order to be able to use electricity, the customer must top up the meter with an electricity credit. When the electricity credit is used up, the prepayment meter switches off. The meter can only be reactivated when new electricity credit has been recharged. Some meters activate an economy mode before they are completely switched off, in which a limited power consumption is possible for a limited period of time (e.g. restriction to a maximum of 500  watts ). This is to ensure that, for example, the refrigerator continues to run for a while.

Top up the electricity credit

How the electricity credit is topped up depends on the meter technology used. So far, the following variants have been used:

Manual top-up using a card, chip, key or code

The currently most widespread solution for topping up a prepaid meter is manual topping up. The customer receives a card, a chip or a key for his prepayment counter. He can top up this at a special pay machine (this usually belongs to the basic supplier) by paying in cash or paying with an EC card with electricity credit.

In addition to paying at the pay machine, some electricity suppliers also offer the option of paying in cash in the customer center, at service partners or topping up at ticket machines.

The loaded medium (card, chip, key) is usually held in front of the meter to transfer the credit.

Another option is to top up by code . After paying for his electricity credit, the customer receives a code that is entered via a button on the prepayment meter.

Online top-up

A more modern way of topping up prepaid electricity credit is online topping up via a web shop or app .

The customer receives a customer login from his electricity supplier with which he can buy his electricity online. After the purchase, the credit is transferred online to the meter. The customer is therefore not bound to certain locations or opening times for charging. It does not have to physically interact with the meter. In the customer area of ​​the web shop or in the app, other services are often offered, such as online consumption monitoring or top-up reminders. Online charging may become increasingly important in the future as part of the introduction of intelligent meters.

Spread of prepaid electricity

In many countries outside of Europe, e.g. In South Africa, the USA, New Zealand, Argentina and Sudan, for example, prepaid electricity is already widespread. In Europe, prepaid electricity is mainly offered in the Netherlands, Great Britain and Austria.

In Germany, due to the high acquisition costs for prepayment meters, prepaid electricity has so far been mainly used in laundry rooms in apartment buildings or occasionally by customers with poor payment behavior.

Around 17,000 prepayment meters are currently in use across Germany. With the introduction of smart meters (Engl. Smartmeter) should technology be cheaper and thus find more widespread.

Advantages and disadvantages of prepaid electricity

Advantages of prepaid electricity

transparency

More than half of the German prepaid electricity users surveyed in a study by the Wuppertal Institute felt that the cost transparency of prepaid electricity was a decisive advantage.

By topping up and prepaying an electricity credit, the customer has an overview of his energy costs. The remaining credit can be checked on the prepayment counter. Online solutions offer graphical representations of electricity costs.

flexibility

With prepaid electricity, customers can manage their electricity costs more flexibly than with a normal electricity contract. In contrast to the usual advance payment model, the customer is not bound to fixed payment dates and amounts. He pays for his direct consumption and can use his financial resources more efficiently. This is particularly interesting for people who are often on the go and therefore have highly variable energy costs or who do not have a large, predictable income.

Savings potential

Thanks to the transparency of the prepaid electricity model in conjunction with a medium for visualizing energy consumption (e.g. website or app), the customer can better understand his energy consumption and thus more easily determine potential savings.

Studies in New Zealand, the USA, Argentina, Great Britain and Germany have shown that prepaid electricity customers have been able to significantly reduce their electricity consumption. The study by the Wuppertal Institute assumes optimization potential of over 20% for German consumers.

There is further potential for savings for people who do not use their apartment regularly or share it with others. With traditional energy providers, there is usually a monthly basic price, regardless of whether the living space is used or not. Prepaid electricity can be an alternative here, as only actual consumption is billed.

Protection against over-indebtedness

In 2017, around 344,000 households in Germany were cut off because of unpaid payments or bills. In addition, electricity customers have to reckon with additional costs of approx. 150 euros per blocking for reminders, blocking and unblocking. For people with tight budgets, this is a financial burden that can end in a spiraling debt.

The principle of prepayment means that no additional payments can be made. This is also advantageous for shared apartments or sub-tenants of apartments, because the prepaid electricity is paid for by those who use the living space.

Disadvantages of prepaid electricity

costs

Due to the more complex technology, the use of prepayment meters is currently (as of 2019) even more expensive than that of a conventional electricity meter. In the case of the variant with online charging option, the provider also incurs costs for data transfer.

Prepaid electricity offers are therefore usually in the middle to upper price segment. This disadvantage can be compensated by the improved possibilities for saving energy and by avoiding additional costs.

Availability

In Germany there are currently only a few providers of prepaid electricity due to the high technology costs. Some local energy suppliers offer prepaid electricity in individual cases to secure outstanding claims. In these special cases, only manual charging of the electricity credit is offered. In addition, prepaid electricity is usually only used until the existing electricity debts have been repaid.

Web links

Individual evidence

  1. ↑ a b SWDU: special electricity tariffs. Retrieved January 18, 2019 .
  2. ↑ Bernward Janzing : Prepaid for poor electricity customers: charging and withdrawing electricity . In: The daily newspaper: taz . December 14, 2012, ISSN  0931-9085 ( taz.de [accessed January 20, 2019]).
  3. ↑ Top up electricity by prepaid - Wuppertal Institute for Climate, Environment, Energy. Retrieved January 18, 2019 .
  4. ↑ Report of the Federal Network Agency: More households shut down electricity because of unpaid bills . In: Spiegel Online . November 10, 2018 ( spiegel.de [accessed January 18, 2019]).