Studies show that German households could save several hundred Euros per year by switching to an alternative gas or electricity supplier. Reliable and easily accessible information for switching to a more favorable electricity or gas supplier could facilitate switching and herewith relieve consumers from a significant financial burden. In this context, comparison portals for gas or electricity prices play an important role. They can be a useful tool for consumers to find the most suitable offer for them. However, these portals have been subject to criticism. Among other things it has been called into question whether profit-seeking comparison portals that commonly finance themselves by obtaining commission payments can provide objective recommendations for finding the optimal offer for gas and electricity.
In this light, the Ministry of Rural Affairs and Consumer Protection of Baden-Württemberg (MLR) mandated ConPolicy to conduct a study on comparison tools for energy tariffs. The objective of the study is to systematically analyze how shortcomings in comparison tools for energy tariffs in Germany can be addressed and thus obstacles to supplier switching reduced. The initial research question is whether a publicly organized reference portal for consumer price comparison could be a useful instrument. To cover a broad range of options, the study examines seven different approaches with regard to their respective strengths and weaknesses. The anaysis is based on a literature and media review, expert interviews, an analysis of selected good practices and contributions by a consultative group that was installed to advice the research project.
The main findings of the study are the following: The current situation of comparison tools for energy prices in Germany is characterized by a range of shortcomings as well as strengths. A combination of two different approaches is most suitable to address the existing deficits: compulsory minimum standards for selected issues with energy comparison portals aim at gradually addressing malpractices identified as most urgent. This instrument is supported by regular tests by independent institutes and consumer organizations. Beyond this, we propose three complimentary measures: i) an improved supervision of the energy providers that operate in the market, ii) a strengthening of independent ratings of energy providers, and iii) consumer-friendly legal requirements for letters detailing price increases and an effective enforcement of these requirements.
The study was presented by ConPolicy on March 27, 2017 in the Representation of the State of Baden-Württemberg to the EU in Brussels.
The minister for consumer protection of Baden-Württemberg, Peter Hauk, said during the event: “As a next step, together with the German government and business as well as consumers’ representatives, we plan to talk about specifying the rules of the game and minimum requirements as well as the implementation of the suggestions put forward." The (German) press release of the MLR can be found here.
The study by ConPolicy can be downloaded here.