Everything you need to know to save on your electricity Bill

electricity Bill

Usually, we all talk about how basic expenses have increased in Spain in recent years, specifically the tremendous increase in the electricity bill. Even without major changes in our home, we have all noticed this increase.

The cost of energy

It is a well-known fact that the electricity bill has increased by around 60% since 2007 for the vast majority of consumers in Spain. One of the elements that explain this change is the increase in the fixed concept for energy contracted within the electricity bill. This measure confirmed the negative consequences for the consumer’s pocket and the environment. In addition to the negative impact on the personal economy, the environment also suffers. It is a kind of almost flat rate, where two-thirds of the account is fixed (taxes and the minimum to be paid), and only one is variable (the real expense of each household).

Obstacles in saving energy

This new concept of rate (or tax) makes it extremely difficult to implement energy-saving and efficiency systems. With the implementation of this billing method, any conscious intention to save electricity is totally impossible.

The production of electricity in Spain is based mainly on the use of coal and oil, which generate carbon dioxide (CO2). In addition, these emissions imply changes in the climate; The use of fossil fuels also implies the expulsion of chemical products and gases that are harmful to the environment and that seriously worsen people’s health.

The electricity bill paid by most citizens has increased by around 60% since 2007. However, the average income of Spanish households has decreased by 8.5% since that year, according to data from the National Institute of Statistics (INE). The consequences are easy to deduce: it has become very difficult to assume the price of electricity, to the point that around 1.4 million households have suffered power outages due to non-payment of electricity in Spain.

One of the factors that explains this increase in the electricity and electricity bill, even though the same power is used, is the way it is billed now: the price of fixed concepts has increased, while the variable cost has diminished. Consumers pay the electricity bill for a fixed concept, which is called “contracted power”, and a variable monthly consumption.

To understand what electrical power is, you must first know what energy is, which is nothing more than the capacity of an electrical mechanism to do work.


Energy Characteristic
 2,3 kW Studio without air conditioning
3,45 kW Small studio without air conditioning, with small appliances
4,6 kW Average apartment with air conditioning in some rooms + small appliances
5,75 kW Average apartment with air conditioning + average use of appliances (oven, dryer…)
More than 6 kW Medium / large apartments with air conditioning and significant use of appliances
Between 6 or more than 10 kW Customization by each electric company


The “contracted power” is the maximum power that can be consumed at the same time. That is the amount of energy that we can use to connect electrical devices. Electricity is subscribed by the client with the electric company based on the basic needs of the home.

If many devices are connected, a longer term of power will be needed and this will mean an increase in the electricity bill.

On this subject, the companies unashamedly point out that this measure is necessary to compensate for the fall in energy consumption in Spain and the maintenance costs of the main infrastructures to bring electricity to each home.

Obviously, if we opt for a very high “contracted power”, many appliances and electrical appliances can work at the same time, but obviously, the fixed cost in the electricity bill will be higher, even if all the appliances are turned off.


How to pay less on electricity bills

Reducing the contracted power is a decision that each consumer can make to reduce costs and also to reduce the environmental impact. To understand how we can reduce our expenses we must know two things:

1.      How is the price of kWh measured today?

The measurement of the price of kWh is currently done through the electricity meter. Currently, this can be analogue or digital and allows the distributor and marketer to know the consumption of users.


  • Analog counter: It is the classic counter. To be able to read this type of meter, it is enough to look at the front of the mechanism, where we can read five figures that indicate consumption. These light readings must be done physically. The great disadvantage they have is that they do not allow remote reading and they cannot be self-managed.
  • Digital meter: The new digital meters are characterized by the functionalities and implementations they can support: they allow Tele-Management and can be self-managed. We want to emphasize that before 2019 all analogue models will have to be replaced by digital gauges.


2.      Who decides how much a kilowatt-hour costs?

The Ministry of Industry changed the model to set the cost of a kilowatt hour of light in April 2014. That year it withdrew the electricity auctions as a system to determine this amount and allowed it to be established through the wholesale market.

These modifications have not only caused a change in the billing system but also in the offers that are available in the free and regulated markets.

We will see in detail both cases.

The Voluntary Price for Small Consumers has a price established by the government and has two options for each user:

  • Price of electricity per hour, where a cost is marked for each hour of the day and a digital meter is required for it.
  • Weighted price of electricity, which averages the amount and is only valid for those who have an analogue meter.


As for the free market rate, it allows the consumer to determine a quarterly price, which allows him to know the cost of energy before the electricity bill arrives. There is no distinction by the type of counter the user has.

Finally, the annual fixed rate determines a price per kW/light for electricity supply throughout the year, but this contract includes permanence and is also available to customers with any type of meter.

Knowing this information, we can follow some guidelines to save on our electricity bill:


  • Calculate the expenses that can be assumed. The average annual consumption of a home in Spain could be, according to the Institute for Energy Diversification and Savings, the price of the fixed “contracted power”, which is independent of the consumption made by the user.


Let’s see a real example: a house that has 100W of lighting at the same time of night: a 2,000W washing machine and a 1,000W washing machine for the rest of the appliances, consumes a total simultaneous power of 3,100W (3.1kW) so that it could contract 3.3 kW of power.

How is this reflected in the electricity bill expressed in €/kW/month? With a contracted power of 6.6 kW, almost €20 per month is applied for contracted power and this concept is paid even if the house is empty.

The power is controlled by the ICP, Power Control Switch, which you will find next to the general electrical panel, normally inside the house. This switch, also called a limit switch, automatically disconnects if the contracted power is exceeded, that is, it turns off the light when more power than the contracted power is consumed.

To know what power we have contracted, we must look for it in any of the electricity bills, there we will read the contracted power in kW. As we mentioned before, in order to get some savings, we need to know how much energy we really need. Some electric companies have energy calculators on their websites. Endesa seems to give more complete information than Iberdrola, but we must be careful when using them since it is likely that we will obtain different results in each one of them.

Free calculators on the web

You can find one of the most complete calculators we have found and it is in English at this link.

Or you can just google: “Calculate Electric Power Consumption” and you will get thousands of links to get more or less accurate electricity consumption in kW.

Another method is the following: We can obtain an approximation of the necessary power in the following way:

  • We add the power (kW) of all the higher-power appliances that will normally work at the same time.
  • To the previous sum we add a margin of 1kW for lighting and small appliances.
  • Once this sum is completed, we choose the closest upper echelon of contracted energy.


Can we save?

As a general guide, a home with a gas supply for heating and hot water and without equipment such as air conditioning or an electric stove, would have enough with a contracted power of between 3.3 kW and 4.4 kW. On the other hand, a house that has, for example, an electric heater for hot water or an air conditioner, must use a higher power, approximately 5.5kW or possibly more.

Suppose we have calculated the maximum amount of KW and we want to reduce the contracted power, how do we do it?

The first thing to check is that the electrical installation is correct and in good condition. If the house is more than 20 years old, it is almost certain that the installation must pass an inspection and present the electrical installation bulletin (Certificate) to the Industry Delegation and also to the electric company.

If we do not have the certificate, it is not up to date, or it has not been registered, we must hire a licensed electrician for an inspection.


If the installation is correct, we will proceed as follows:

  • We will call the electricity company to reduce the chosen power. It is the user who must indicate the chosen contracted power following the steps mentioned above.
  • The company is obliged to proceed with the reduction of the requested power for a period of 5 days. In that period of time. The company must visit your home and proceed to change the ICP Power Control Switch and seal it to prevent any tampering. This work has an associated price of €10.94 (VAT included).
  • If the company has not processed the order within five days, the company must compensate the customer with €30, which will be reimbursed in the following electricity bills.


If you need more advice on how to save energy, you can contact our architecture studio: Pacheco & Asociados Architects.

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