How to pay less for electricity in Spain

Of the four components of an electricity bill, only contracted capacity and energy consumed depend on your decisions; the rest are fixed charges and taxes applied on top of what you already pay.

The electricity bill has become a bar-conversation topic. And for good reason: when the bill arrives, it feels like there is no room for manoeuvre. But the truth is there are two levers you can pull, and understanding them is the first step towards paying less.

## The four blocks you pay every month

Every electricity bill consists of four items. The first is **contracted capacity**, a fixed charge paid every day regardless of what you consume. The second is **energy consumed**, which varies with your usage. Added to these are charges such as meter rental, the electricity tax and the bono social (a subsidised rate for vulnerable households). On top of all that, **VAT** is applied, taxing even the taxes already included. Of the four, only the first two can be adjusted; the rest are imposed and applied on top of what has already been charged.

## Contracted capacity: the charge you pay even when nothing is switched on

Contracted capacity is measured in kilowatts and determines how many appliances can run at the same time. Contracting more than you need makes your bill more expensive every day of the year, even when the house is empty. Adjusting it to your actual consumption —without going too low— is one of the most direct ways to cut costs. The capacity charge is billed in tiers and appears on the bill as a fixed daily amount.

## Energy consumed: where the rest is decided

Energy is charged per kilowatt hour consumed and its price depends on the tariff you choose. On the regulated market, the **PVPC**, the price per kilowatt hour changes daily and is published in advance. Retailers on the free market offer fixed prices or discounts that may be cheaper at a given moment, but it is worth checking the terms and the length of the contract before switching. Comparing the price per kilowatt hour, not just the monthly fee, is what tells you whether an offer is genuinely cheaper.

## What you cannot change

Meter rental, the electricity tax and the bono social are regulated charges. **VAT** is applied to the total, including those charges, so you pay tax on tax. There is no room to negotiate them: they appear on the bill with their amount and are paid as they are.

Before changing tariff or capacity, it is worth reviewing your consumption history and consulting an independent energy adviser. Any decision about contracts has financial and legal consequences that depend on each individual case.