Everything You Need to Know About Fixed Price Energy Tariffs

What is a fixed price energy tariff?


A fixed tariff ensures you are charged at the same unit rate and standing charge, until the termination of your contract. These are not only popular for domestic usage, but also for business energy users. A fixed energy tariff ensures that even with the continuous changes affecting the energy market, the price will remain stable throughout the length of the contract.


This has proven to be greatly beneficial in protecting businesses from price hikes. However, it is important to note that with a fixed price energy tariff your monthly bill will still fluctuate based on the amount of energy consumed.


The more energy used means the higher your monthly bill. For this reason, a fixed energy tariff may not be beneficial to those households or businesses who use a varying amount of energy from one month to another. 


Would You Benefit from a Fixed Energy Tariff?


If you are trying to decide whether a fixed energy tariff would benefit you, there is a lot you need to consider first. For starters, on Monday 1st of April, average annual energy bills are estimated to fall by 12% for anyone on price-capped tariffs for the domestic market.


These prices change every three months in line with the cap, therefore when considering whether to switch to a fixed energy tariff you should research into what is most likely to happen to energy bills over the course of the next few years.


For example, if you sign a contract today for a fixed energy tariff and in the next few months energy bills fall, you will not benefit from this. On the other hand, the opposite can also be said. If the contract was to be signed today and the wholesale cost were to increase in the next couple of months, you would not be affected by this price rise. 



Business Energy Fixed Price


For business energy it can be great, as a fixed energy tariff guarantees predictable cashflow. If you are considering switching to a fixed energy tariff and would like a quote to find the cheapest prices get a quote from us here at: Get a Quote 

Advantages of Fixed Rate Tariffs for Business’s 


  • Fixed tariffs are great for new businesses who are trying to keep a steady track of their finances. A fixed rate tariff allows them to lock in stable prices giving them peace of mind knowing their unit rate or standing charge costs will not increase. 


  • You can choose from longer or shorter contract lengths depending on your business’ needs. 


  • If your business uses a smaller amount of energy each month a fixed rate tariff is perfect for you. For example, if you are a small high-street store. 


  • You can get 1-year or less fixed energy deals, meaning you can pay consistently priced bills over a short amount of time, then re-assess your options later. 



Disadvantages of Fixed Rate Tariffs for Business’ 


  • If wholesale energy prices fall lower than your contracted fixed unit prices, then you could end up spending more on your monthly energy bills. 


  • Although a 3-year contract would ensure stability, you will not have the flexibility to change your energy bills which may hinder your business. 


  • If you do not renew or arrange a new contract then your current supplier will put you on a standard variable tariff, which could result in you paying way more than you accounted for. Your energy supplier will contact you around 7 weeks before your current energy deal ends, so it is important to arrange a new contract as soon as possible to avoid higher energy tariffs. 


If you’re ready to start saving or start to navigate the markets, either call us or click below to get a quote. 


We only need a few details, all available on an energy bill to negotiate quotes with our selected energy suppliers or if you would like us to monitor the wholesale market to ensure you make a well-educated decision. Please input your details below. 


Figure 1: Sarah Taylor, February 23, 2024. Ofgem Energy Price Cap April 2024: 3 Fascinating Graphs to Understand it Better. [Accessed 19th March 2024] [Online] Available at: https://www.greenbuildingrenewables.co.uk/energy-price-cap-april-2024/ 


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