How to read your electricity bill step by step

Why is it important to understand your bill?

Your electricity bill is one of the most confusing documents that arrives in your mailbox. However, understanding it is the first step to detecting if you’re overpaying and making better decisions about your tariff.

The 5 main sections of your bill

1. Contract details

In the first section you’ll find:

• CUPS: your unique supply point code (starts with ES). It’s like the “ID” of your meter.
• Contracted power: measured in kW. On a 2.0TD tariff you have two power levels: peak (P1) and off-peak (P2).
• Access toll: usually 2.0TD for households.

Tip: Check your contracted power. Many households have more power than they need. Reducing it can save €50–100/year.

2. Power charge (fixed part)

This is what you pay for having access to the electricity grid, regardless of whether you consume or not. It is calculated as:

Power cost = Contracted power (kW) × Price (€/kW/year) × Billing days / 365

This amount is virtually the same across energy retailers, since access tolls are regulated by the government.

3. Energy charge (variable part)

This is where your tariff really matters. It is what you pay for each kWh you consume:

Energy cost = P1 consumption (kWh) × P1 price + P2 consumption (kWh) × P2 price + P3 consumption (kWh) × P3 price

The time-of-use periods on a 2.0TD tariff are:

• P1 (Peak): 10:00–14:00 and 18:00–22:00 → Highest price
• P2 (Shoulder): 08:00–10:00, 14:00–18:00, 22:00–00:00 → Mid-range price
• P3 (Off-peak): 00:00–08:00 + weekends and public holidays → Lowest price

4. Taxes

• Electricity Tax (IEE): currently at 2.5% (reduced from the original 5.1%)
• VAT: 21% on the total (temporarily reduced to 10% during the energy crisis)

5. Other items

• Meter rental: if you don’t own it (~€0.80/month)
• Social bonus funding: a small solidarity surcharge
• Surplus compensation: if you have solar panels, this is where you’ll see the discount for the energy you feed back into the grid

How to tell if you’re overpaying?

Warning signs:

1. Power too high: If your circuit breaker never trips and you have more than 5.75 kW contracted, you can probably reduce it.
2. High P1 consumption: If more than 40% of your usage is during peak hours, try shifting appliances to P3.
3. High energy price: Compare your prices with the market. If your P1 exceeds €0.20/kWh on a fixed tariff, there are cheaper options.
4. Add-on services: Insurance, maintenance, etc. that you didn’t ask for and that inflate your bill.

Next step

Upload your bill to Smart Light and we’ll tell you exactly how much you can save by switching tariffs. We analyse your real data and compare it against over 400 tariffs on the market.