It's no secret that the cost of utilities in Portugal is relatively high, which is why this expenditure item will be a significant part of your monthly expenses after immigrating to Portugal. Earlier in one of our articles, we already wrote about tariffs for housing and communal services in Portugal, and today we will talk about how you can save on electricity bills by connecting the correct tax for you.
Types of electricity tariffs in Portugal
There are three types of electricity tariffs in the country: a simple tax (tarifa simples), where the price of electricity is the same at any time of the day; double tax (tarifa bi - hor á ria), where the day is divided into two periods of consumption with different electricity prices; triple tax (tarifa tri - hor á ria), where the day is divided into three time periods with different costs depending on the period of consumption.
It is vital to know what advantages and disadvantages each of the listed tariffs has because when agreeing to the supply of electricity, you will be asked to choose one of them, and often people choose a simple tax by default (tarifa simples), not understanding how it differs from the other two options.
Why are there multiple electricity tariffs in Portugal?
The answer to this question concerns the total electricity consumption in Portugal and the supply and demand curve. Since most companies operate only from Monday to Friday and during the daytime, it turns out that it is during these periods that the demand for electricity in the country is higher. And, as you can suppose, when energy demand goes up, prices go up with it.
That is why energy companies create different tariffs, offering lower electricity prices at night and on weekends.
Let's take a closer look at each of the tariffs and find out what type of people they suit best.
Electricity Cycles: Cyclo di á rio and ciclo semanal
First of all, when entering into an electricity agreement, you will be asked to choose one of the available cycles:
- Daily cycle (Ciclo diário) - in this case, the electricity cost is the same on weekends and weekdays. Therefore, this option suits those with constant electricity consumption during the week.
- Weekly cycle (Ciclo semanal) - in this case, the cost of electricity is different on weekdays and weekends. Therefore, this option suits those who use electricity more intensively on weekends.
Simple tax: Tarifa simples
Well, you have already decided on the cycle of electricity consumption. Now it's time to move on to the tariffs. The difference between the tariffs is explained conveniently using graphs on the EDP website, which we will use in this article.
And we will start with a simple tariff (tarifa simples), which most people choose by default.
If you choose a simple tariff, you will have a constant price for 1 kWh, regardless of the time and day of the week.
A simple tariff is best for you if:
- You have approximately the same level of energy consumption throughout the day, and various high-energy appliances are constantly running in the house, for example, a refrigerator (250W) and a freezer (250W);
- You work from home, and therefore your laptop (300W) is constantly plugged in throughout the day;
- You always eat at home and use an induction cooker (1350 W - 1 burner);
- You constantly use equipment such as oil heaters (2500 W), air conditioning (2500 W), or plasma TV (300 W) during the day;
- Comfort is critical to you, and you do not want to bother adjusting your business to those hours when electricity is the cheapest.
Double tax: Tarifa bi-horaria
As we have written above, with a double tariff (tarifa bi - horária), the day is divided into two consumption periods with different electricity prices. In this case, the cost of electricity will directly depend on the time you use electrical appliances.
With a double tariff (tarifa bi - hor á ria) days are divided into:
Off-peak hours (Horas de vazio) are the hours when electricity consumption in the country is the lowest. This is mainly at night and on weekends when the average level of consumption is lower. Therefore, the cost of electricity at this time is as low as possible, and usually, the price for 1 kWh is about 50% lower than in a simple tariff at standard times.
Peak hours (Horas fora de vazio / cheias) are the hours when electricity consumption is usually higher and, therefore, more expensive.
Depending on the cycle and period of a year, the division of the day into peak and off-peak hours is as follows:
That is, it turns out that if you choose a daily cycle, then in the case of an EDP company, you will pay 50% less per kWh from midnight to 8 am and from 22 to 24 hours.
If you have chosen a weekly cycle, you can also use cheap electricity on Sundays and at certain hours on Saturdays (darker parts in the graph above).
Double tariff is best for you if:
- If you consume more than 20-40%* of your total electricity per day between 22:00 and 08:00;
*this percentage differs depending on mathematical calculations. For example, in this article, according to the estimates, 15% turned out to be an advantageous limit for switching to a double tariff;
- You have the opportunity to choose the time and use certain electrical appliances (for example, a washing machine or a vacuum cleaner) only in the evening hours after 22:00 and on weekends;
- You are active in the morning, waking up early and doing various tasks around the house until 8 am;
- You are constantly away from home and rarely cook, but you can cook food to go to work during the period with cheaper electricity, from 22:00 onwards.
Important: It is essential to know that some companies charge a higher cost for double tariff users, which in Portuguese is called "pot ê ncia contratada". This is a separate line on the electricity bill and is calculated as the base cost of the contract multiplied by the number of days in the month (that is, this is a value that does not depend on your consumption). Keep this in mind when comparing prices from different electricity providers.
Triple tariff: Tarifa tri-horaria
A triple tariff (tarifa tri - horária) is very similar to a double tariff, with the only difference being that, in this case, the day is divided not into two segments but into three:
Off-peak hours (Horas de vazio) are the hours when electricity consumption in the country is the lowest. This is mainly at night and on weekends when the average level of consumption is lower. Therefore, the cost of electricity at this time is as low as possible, and usually, the price of 1 kWh is about 50% lower than in a simple tariff.
Middle hours (Horas de cheias): hours when electricity consumption is at an average level and is paid at an average price.
Peak hours (Horas de ponta) are the hours when electricity consumption is usually higher and, therefore, more expensive.
Depending on the cycle and period of a year, the scheme for division of the day into three periods at a triple tariff is as follows:
At the same time, red zones are off-peak hours with the cheapest electricity.
Triple tariff is best for you if:
- You consume more than 20% of electricity per day between 22:00 and 08:00, and do not consume it from 09:00 to 10:30 and from 18:00 to 20:30. Since the cost of electricity during these periods is the highest.
By the way, we give all the divisions by hours above using the example of the EDP energy company, but you can find such information on any website. For example, here's what it looks like on the GALP website. There you can also find the cost of electricity for each cycle and tariff.
Use pricing information to your advantage
Understanding what electricity tariffs are in Portugal, we can change one tax for another several times a year because most companies allow users to change the tariff in their account on the website in just two clicks.
You can try living one month with a simple tariff, and the second month with a double one, and compare the final amounts of electricity bills.
Also, you can switch from a simple tariff to a double one in winter and heat the room until 8 am, saving you 50% of energy on expensive heating in winter. And no, getting up at 6 am is unnecessary to turn on the heater. You just need to buy special adapters with timers for sockets (for example, this one) that will turn on your heater at the time you set in advance.
Understanding the main differences between the tariffs in Portugal, you can change them at your discretion from time to time, choosing the one that best suits your needs and lifestyle at the moment.
We hope this article is helpful for you, and you can use this knowledge.