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A Guide To 2 & 3 Year Fixed Tariffs

Fixed-rate energy tariffs remain a popular choice among both residential and commercial energy consumers, offering the advantage of stable unit prices for effective energy bill management.

However, given the recent volatility in the whole energy supply market, there is growing scepticism about the continued value for money provided by fixed-price tariffs.

Despite the protective measures of the energy price cap, which shields households from high energy costs, 2023 has witnessed pervasive concerns about rising prices.

This extends beyond residential energy users to business energy consumers. To aid both sectors in evaluating the viability of fixed-rate energy tariffs in 2023 and anticipating future scenarios, we have compiled this guide on everything you need to know about fixed energy deals.

Given the diverse array of electricity and gas tariffs and deals saturating the supply energy market, individuals and businesses often find themselves deliberating over the suitability of 1, 2, and 3-year fixed energy tariffs.

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What Are Fixed-Rate Energy Deals?

Firstly, fixed-rate tariffs provide consumers with a steady unit rate, ensuring that the unit price remains constant throughout the billing period. Whether you opt for a 1-year fixed-price energy deal or a 2-year fixed energy tariff, you can count on consistent unit prices.

However, it’s crucial to keep in mind that your monthly bill may still vary. If both your gas and electricity usage fluctuates from one month to the next, your bill will reflect these changes.

Therefore, fixed deals are most suitable for domestic and commercial consumers with relatively stable energy consumption from month to month.

Should I Get A Fixed Energy Deal In 2024?

In 2023, we have observed a consistent decrease in wholesale gas and electricity prices, in contrast to the record highs witnessed earlier in the year. The UK government launched the Energy Bill Discount Scheme (EBDS) in April 2022, replacing the previous Energy Bill Relief Scheme (EBRS).

This new scheme aims to provide reduced-level support on energy bills for businesses and other non-domestic customers, prompting consumers to reconsider the value of securing a fixed business or domestic energy deal for 2025.

Our recommendation is affirmative: if a better deal is available, opting for a fixed energy tariff is advisable. Despite the decline in wholesale market prices, they remain significantly higher than those in 2021 and are anticipated to rise in 2025.

The persisting challenges in energy security contribute to the volatility of the wholesale energy market, where prices can fluctuate daily. When you switch energy suppliers and fix the amount of money you pay, you will save money and can safeguard yourself or your business against potential future price hikes.

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What is A Fixed Energy Tariff?

Navigating the energy market can be complex, especially with regulation changes, industry jargon, and the ongoing energy price crisis. Finding the right deal can often be deprioritised by business owners.

Our energy experts understand the importance of providing a comprehensive view. We’ve compiled a range of the best deals for your business to help you assess whether to switch energy supplier.

Should Businesses Choose Fixed Energy Contracts?

A fixed tariff may not be the best choice for all businesses. Some businesses can benefit from consistent unit prices, while others might find variable rate tariffs or dual-fuel tariffs more suitable.

Advantages of Fixed-Rate Business Energy

  1. Ideal for startup businesses looking to lock in specific prices for stable bills as they grow.
  2. Perfect for businesses with consistent monthly energy usage, such as small retail shops or offices with a small team.
  3. 1-year fixed energy deals offer consistent bills over a short period, allowing business owners to reassess their options later.

Disadvantages of Fixed-Rate Business Energy

  1. Despite the appeal of 2-year fixed tariff deals, there’s a risk of spending more than necessary if wholesale energy prices fall below fixed unit rates.
  2. Fixed-rate tariffs come with options for 1, 2, and 3-year terms. Opting for a 3-year fixed energy contract, however, means sacrificing the flexibility your business might require.
  3. If you fail to renew your contract or request an alternative one, your energy supplier will automatically switch you to a standard variable tariff. The unit prices for standard variable tariffs can be adjusted by the energy supplier at their discretion, earning them a reputation as one of the most costly types of tariffs.
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Fixed-Rate Tariffs for Home Energy

Choosing the right home energy tariff can be a crucial decision for domestic consumers. With various fixed-price energy tariff options available on the market, homeowners and renters should carefully consider their choices.

Our experts have compiled essential information to guide individuals through the details of fixed-rate tariffs.

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Should Homeowners Opt for Fixed-Price Tariffs?

Domestic consumers have a range of options, including standard variable tariffs, fixed-rate tariffs, dual fuel tariffs, and pay-as-you-go meters.

For homes with consistent monthly gas and electricity usage, fixed energy deals are a recommended choice. When considering 3-year, fixed-rate tariff deals, it’s essential to weigh the advantages and disadvantages.

Advantages of Fixed-Rate Home Energy

For many domestic consumers, the benefits of fixed deals often outweigh the drawbacks:

  1. Cost-Effective: Fixed contracts typically offer lower prices compared to variable tariffs.
  2. Protection from Price Hikes: Unit rates on fixed tariffs remain unaffected by market price increases, providing insulation from inflated costs.
  3. Budget Control: Fixed deals are an excellent choice for domestic consumers seeking to manage and stabilize their monthly expenses.

Disadvantages of Fixed-Rate Home Energy

They don’t automatically switch, unfortunately. You’ll have to adjust them manually. It’s worth noting that some suppliers simply use winter times (GMT) throughout the entire year.

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Compare Business Energy & Home Energy

At Business Energy Comparison, we understand the challenges when you switch energy suppliers and tariffs.

To simplify this process, we provide an energy supplier comparison generator. Both residential and business customers can enter their information and get a selection of appropriate offers in just a few minutes.

Compare energy prices with Business Energy Comparison, speak to our energy consultants now!

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