In the coalition agreement, the German government set itself the goal of reducing energy prices and thus easing the burden on private households and the economy. Three initial concrete measures are planned, in order to significantly reduce costs for everyone from January 2026 onwards. These first steps towards lower energy costs are aimed at strengthening the economy within Germany and helping to secure jobs. “We are now lowering energy prices to secure jobs in this country”, said Federal Minister of Finance Lars Klingbeil. “Our top priority is to get Germany back on track for growth.”

100 euros relief for families of four

In total, citizens will receive energy cost relief to the tune of 10 billion euros per year – in addition to the existing relief of 17 billion euros provided through the assumption of the former EEG levy for renewable energies. A family of four can expect to save up to 100 euros in energy costs each year from the beginning of 2026. 

At the same time, the Federal Government must operate soundly and responsibly. “We can only spend the money we have”, Federal Chancellor Friedrich Merz emphasized on the fringes of the banking industry conference in Berlin. However, the goal of reducing energy prices remains: “We want to further reduce electricity costs if we have the financial scope to do so”, said the Chancellor. “This Federal Government will act with honesty.”

This is how the relief for consumers will work: 

• The gas storage levy is to be abolished on 1 January 2026. The gas storage levy account will be balanced with around 3.4 billion euros from the Climate and Transformation Fund by then. From January 2026, the gas storage levy will no longer be charged for all gas customers, and the gas price will fall. The lower gas prices also ensure more favourable electricity production from gas-fired power plants. Electricity prices on the market are also likely to fall, as they are geared towards the most expensive energy sources – which is often gas.
• The reduction in the electricity tax should continue to apply in the long term. This will relieve the burden on all manufacturing companies as well as agriculture and forestry, including small and medium-sized enterprises – from butchers and bakeries to energy-intensive companies and the construction industry. This measure will burden the budget with around three billion euros a year.
• The Federal Government also intends to assume part of the transmission grid fees and levies from 1 January 2026, with a planned subsidy of 6.5 billion euros. Every single consumer and all companies will benefit. 

A few steps are still necessary before the measures can come into effect on 1 January 2026. The draft budget is now entering the parliamentary process, meaning the first consultation on the draft budget in the Bundestag is scheduled for the beginning of July. The Bundestag is currently expected to finalise the 2025 budget in September. If the Bundesrat then approves the draft, the budget law will then be signed by the Federal President. Only then can it come into effect. In addition, the Federal Government will introduce legal regulations for the individual energy price measures.