From 1 January 2026, the Danish government will reduce the electricity tax (elafgift) for households from the planned 72.7 øre/kWh to just 0.8 øre/kWh — the lowest rate allowed under EU law.
The change will last at least through 2026 and 2027 and is expected to save households thousands of kroner on their yearly electricity bills.
Why is the electricity tax being cut?
You certainly haven’t missed it: the cost of living has increased drastically the last few years. The government has announced the cut as part of its effort to ease cost-of-living pressures on households and support the green transition. Indeed, the government hopes that lower electricity prices will encourage more people to switch to heat pumps and electric vehicles, since most electricity is today produced from sustainable sources.
Denmark has long had one of the highest electricity tax rates in Europe, with part of that tax going towards financing the green transition.
When does it take effect?
The lower tax will apply from 1 January 2026 through 31 December 2027.
After that, the rate is expected to return to its previous level unless Parliament decides to make the reduction permanent. Several political parties have already expressed support for a permanent reduction, but nothing is confirmed yet.
How much will I save?
Savings depend on how much electricity you use. Here are some estimates based on typical yearly consumption (family = 2 adults + 2 children):
| Type of household | Typical yearly consumption | Estimated yearly saving |
|---|---|---|
| Family in a detached house | 4,500 kWh | ≈ 4,000 DKK |
| Family in a detached house with a heat pump | 10,000 kWh | ≈ 3,500 DKK |
| Single person in an apartment | 1,600 kWh | ≈ 1,400 DKK |
Source: Bolius, August 2025.
On Socialdemokratiet’s (the Social Democrats) website, you can find a simple calculator where you can input your actual yearly consumption to see your estimated savings.
Why are my savings not as high as expected?
The electricity tax is only one part of your electricity bill. As explained in Understand Your Electricity Bill in Denmark and Save Money, your bill is made up of several components:
- Electricity itself (the wholesale price on Nordpool)
- Grid tariffs (for the cables and infrastructure)
- Energinet fees (for national grid operation)
- VAT (moms) – still 25 %
- Your supplier’s margin or surcharge
So while your bill will drop (and that is good news), it won’t be slashed — the change affects only the tax part.
Who benefits the most?
Households without electric heating, who currently pay the full elafgift rate, will benefit most.
Households with electric heating (e.g. heat pumps) already have the option to apply for the lower electricity tax on their electricity consumption above 4,000 kWh/year (reduceret elafgift), and now the tax cut applies to all their consumption.
Single- and 2-person households in apartments will also notice smaller savings, simply because they use less power.
What about when I charge my electric car?
If you charge your car at home and have a contract with a charging operator (like Clever or OK) that is eligible for tax refund, they already take care of getting the electricity tax refunded and sent back to you. With the new tax cut, this will in practice not be necessary anymore. Since charging operators often charge a fee to handle the tax refund (among other services), you might want to check if the other services you get are still valuable for you and/or whether your operator will adjust their fees accordingly.
If you however own your own charging station without a subscription (and therefore pay the full elafgift rate), you should see that your electricity costs go down.
If you charge your car at public charging stations, you will not see any change since they already pay the lower tax rate.
Do I need to do anything to get the lower rate?
The change is automatic — you don’t need to do anything to get it. However, it’s still a good idea to check your plan and provider in the coming months. Electricity suppliers could indeed use this as an opportunity to their fees.
Here are helpful guides to make sure you still get the best deal:
- Cheap Electricity in Denmark: Find the Best Provider
- Fixed or Variable Electricity Plans in Denmark: How to Choose
- Understand Your Electricity Bill in Denmark and Save Money
The bottom line
Though the electricity tax has been slashed temporarily at other times in the past, this is the longest tax cut in years — and a welcome one.
For most households, it means hundreds or even thousands of kroner in annual savings.
But remember: electricity taxes are just one portion of your final bill.
If you really want to pay less for power, the biggest wins still come from choosing the right plan and staying on top of your electricity use.