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The Pros and Cons of Fixed Prices for Sustainable Energy

Shutterstock Licensed Photo - 364049327 | by Mimadeo



The European Union has recently announced some major developments in its bid to stay in the clean energy race. Clean energy is clearly becoming more popular than ever and many people are investing more heavily in it.

A growing number of consumers are relying on sustainable energy, as it becomes more accessible. There are a number of benefits of using green energy. Of course, it is better for the planet. However, eco-friendly energy also tends to be cheaper.

Nevertheless, you still need to pay when you are using energy from renewable sources, unless you are literally producing it yourself. Many energy suppliers sell electricity powered through solar, geothermal or other renewable means. You will still need to know how to pay for the service.

You can get both fixed and unfixed prices when purchasing energy. The pricing structure is the same whether you use renewable or nonrenewable energy.

Benefits of Fixed Prices When Buying Renewable Energy

This article aims to highlight the pros and cons of fixed pricing for renewable energy services, and by doing so assist in answering the question: To fix or not to fix? Fixed” and “standard variables” are the two primary tariffs offered by energy suppliers. You will be more likely to appreciate the benefits of switching to green energy if you feel you aren’t overpaying.

Going with a fixed tariff involves entering a 12-month contract, where the cost of your energy usage remains the same. However, your monthly bill may fluctuate depending on your usage. An early contract exit may result in an additional fee. On the other hand, a standard variable tariff means that your energy rates will go up and down, depending on global energy prices.

Pros of a Fixed Energy Deal

  • Fixed energy deals are often cheaper: Because energy suppliers can lower the rates for their customers when they commit to a long-term contract, fixed energy deals are typically cheaper than variable tariffs. This means that households can save money on their energy bills by switching to a fixed energy deal.
  • You are protected against price rises: One of the main advantages of fixed energy deals is that the cost at which your energy is consumed does not change throughout the duration of your fixed contract. This means that while the wholesale price of gas and electricity may rise over time, you will not be affected by price hikes as long as you are on a fixed contract.
  • There’s a wider selection of deals available: Due to the competitive nature of winning and keeping customers, energy suppliers offer a wide selection of fixed energy deals. This allows customers to make informed decisions on which deals would be best suited to their energy usage. Some of these fixed tariffs may also include benefits such as free boiler cover or insurance on appliances. In contrast to this, most energy suppliers only have one or two variable tariffs to choose from.
  • It’s easier to budget: With fixed energy deals, it is easy to stay in control of your spending. Both unit rates and standing charges remain the same throughout your contract, so you can work out exactly how much you will spend each month. This is particularly helpful for customers who want to budget over a longer period of time.

Cons of a Fixed Energy Deal

  • You might miss out on a better deal if wholesale prices fall: While a fixed price can be both a pro and a con if you are signed up to a fixed contract, there is a possibility of the wholesale price of energy falling during this period. However, due to being tied into a fixed deal, the price of your energy will remain the same. That means you won’t be able to take advantage of a falling market price during your contract.
    • You will be tied in by exit fees: One of the greatest disadvantages of fixed energy deals is there exit fees. If you are unhappy with your energy supplier or have found a cheaper tariff elsewhere, be prepared to pay exit fees for leaving your fixed deal early. Exit fees typically range between £5-£35 per fuel. This means, if your property is being supplied with both electricity and gas, you may be paying up to £70 for leaving your contract before its end date.
    • You may need to switch again when your fixed deal ends: Another downside of fixed energy deals is having to remember their end date. This is because when your tariff expires, your supplier will automatically roll you on to a more expensive standard variable tariff which can increase in cost over time. If you would like to continue enjoying the benefits of a fixed tariff, we would advise keeping a track of the end date so that you are ready to research renewal deals at the right time.
    • It takes time to understand the choices available: Before committing to a fixed energy deal, the pros and cons of each need to be evaluated, and you might find yourself facing too many choices. For instance, do you prioritize lower unit rates for one fuel or the other? Will this change soon? Or does the supplier have good customer service? Whilst these are important factors, researching the pros and cons of each deal available can take some time.

Should You Fix Your Energy Prices

In general, choosing a fixed energy deal can lead to lower overall costs, if you avoid exit fees. When considering a new energy deal, it’s important to think about your current situation. For instance, if you’ve recently moved into a new property and are currently on a standard variable tariff, switching to a fixed energy deal is likely to be a more cost-effective choice in the long term. However, with so many options available, it can be overwhelming. To determine the best-fixed tariff for you, make a list of pros and cons. For more information, see energy guides from Business Energy Comparison.

In Conclusion

More consumers are turning to clean energy than ever. The capacity for eco-friendly electricity is projected to grow 80% from 2020 levels by 2026. As a result, more customers are resorting to using it, which means they have to learn how to structure their prices correctly.

In conclusion, the decision to fix your energy prices comes with both advantages and disadvantages. On one hand, fixed energy deals are often cheaper and protect you against price rises. They also offer a wider selection of deals and make budgeting easier. On the other hand, you may miss out on a better deal if wholesale prices fall, and you will be tied in by exit fees. Additionally, you may need to switch again when your fixed deal ends, and it can take time to understand the choices available.

Ultimately, whether or not to fix your energy prices depends on your individual circumstances. If you have recently moved into a new property and are on a standard variable tariff, switching to a fixed energy deal is likely to be a more cost-effective option in the long run. However, it is important to carefully evaluate the pros and cons of each deal before committing. By creating a list of pros and cons and staying aware of your contract’s end date, you can make the most informed decision and find the best-fixed tariff for your needs.

yan Kh is an experienced blogger, digital content & social marketer. Founder of Catalyst For Business and contributor to search giants like Yahoo Finance and MSN. He is passionate about covering topics like sustainability, green-business approach and high-tech innovations.


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