Study finds almost 50% of consumers in Spain may be paying too much for their electricity

The report analysed over 15,000 bills from the main suppliers over the last year

Patricia Marcos

Madrid

Friday, 4 April 2025, 07:39

The price of electricity continues to generate great uncertainty in the Spanish energy market. Since January electricity bills in Spain have been 11% more expensive following the withdrawal of the exceptional IVA sales tax discount of 10% (now back to 21%), which had been applied from 2021 to deal with the price crisis caused by the pandemic and the war in Ukraine.

This March the average price in the wholesale electricity market, the so-called 'pool', closed at 53.02 euros per megawatt hour (MWh), which is three times higher than a year ago when it stood at 20.27 euros/MWh.

However, thousands of households in Spain might have paid up to 40% more than necessary on their electricity bill in the last year. This is according to a study by energy company Octopus Energy, which has analysed over 15,000 bills from 2024 from the main electricity suppliers in Spain.

Bearing in mind that these companies account for around 85% of all electricity contracts in Spain, the report concluded that 20% of households that are customers of these suppliers were paying up to 40% more for their electricity.

Lack of transparency and retention strategies

Octopus Energy thus asserts that around four million households could be affected by this recent increase in their electricity bills and so could be making savings by reviewing their contract. However, "the lack of transparency, misinformation and retention strategies of traditional electricity companies are holding back this change", stated Octopus Energy.

In fact, only 13.9% of consumers in Spain switched supplier in 2023. It is this very lack of turnover in the electricity market, the study notes, that "contributes to the fact that many people continue to pay out-of-date tariffs or pay above the real price of energy."

"Consumer inertia, coupled with a lack of clear information about the conditions of their contract, allows traditional electricity companies to maintain high prices without a real risk of losing customers," says Roberto Giner, CEO of Octopus Energy Spain, who insists that "reviewing bills is a key exercise to ensure that we are paying a fair price for the electricity we consume."

In addition, this electricity company points to another cause of price disparity in the electricity bills of different customers of the same company: business practices that seek to draw in new customers with attractive offers and misleading calls, while "leaving out of these more favourable conditions those households that have been on their books for the longest time."

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