Energy Plans

The difference between the fixed energy and the variable energy

There are different types of Energy Plans that are available by the suppliers. The most commonly used energy plans are fixed-rate energy plans and the variable energy plan. There are many differences between the fixed-rate one and the variable energy plans. They are as follows:

Fixed-rate energy tariff

A fixed-rate energy plan means that the price range of the energy will remain the same no matter what changes the market might face. The energy plan will cover electricity and gas usage. A fixed tariff will mean that your rate range will not change even though the rates in the market fluctuate due to the market demand and supply.

The advantage of a fixed tariff rate is that it will offer you energy rate security and also it is very cheap when compared to the others. However, you will need to sign a one year contract and you will also need to pay an exit or cancellation fee if you want to end the service soon before the tariff ends.

Variable energy tariff.

This totally depends on the market rate and is usually measured by per unit. The main advantage of the variable energy tariff is that it is very flexible in case of the contract and you will be able to exit the tariff without any cancellation fee.

What should you choose a fixed or variable tariff?


  • Pay the same price no matter what happens to the market.
  • Pay the same price per unit for over a year.
  • You will need to pay an early exit fee if you are willing for earlier cancellation before the tariff ends.


  • The cost per unit can go up or down depending on the market price. Unlike fixed-rate, you will have to pay different costs per unit depending on the fluctuation in the market.
  • You have an open contract. Which means that you can exit whenever you wish to exit.
  • There is no exit fee. You are free to cancel the tariff whenever you want.

Advantages of a fixed rate:

Obviously as discussed, you will have peace of mind and you will mot have to worry about the market fluctuations or the demand and supply ration. Because you will obviously be paying the same amount of cost per unit for over a year.

Fixed-rate has most of the high sales. So there are many competitors out there who can give a good price range. You will have many options to compare against and choose the best one that is well suited for your household or business. This means you can find a good supplier with advantages like free cancellation for a fixed rate.

Disadvantages of a fixed rate:

Since in the fixed rate you pay a cost per unit in the same way for over a year. So, even if the market price drops you will end up paying more amount than the market price. And also, you will have an exit or cancellation fee when you try to exit before your tariff completes.

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