A Guide To 2 & 3 Year Fixed Tariffs
Fixed price energy tariffs are popular for both home and business energy users. A fixed tariff is ideal for managing energy bills at a stable unit price.
However, after the energy crisis, many are questioning whether now is the right time to move to a fixed rat energy tariff. Whilst the energy price cap has helped protect households from even higher energy costs, few fixed rate tariffs have been available under the price cap cost.
But what about business energy? We have created this guide to help business energy users determine if fixed rate energy tariffs are viable in 2025, and what things might look like in a few years.
With so many different types of tariffs and deals on the market, home and business owners often wonder whether 1, 2, and 3-year fixed energy tariffs are the best option for them.
What Are Fixed-Rate Energy Deals?
In simple terms, fixed-rate tariffs guarantee consumers consistent unit rates. The unit rate will not fluctuate over the course of your bill. Whether you have a 1-year fixed price energy deal or a 2-year fixed energy tariff, you can expect stable unit prices.
It is important to remember that your monthly bill can still fluctuate. If you use more gas or electricity from one month to another, your bill will increase. For this reason, fixed deals are best suited to consumers who use a similar amount of energy from one month to the next.
Consider how much energy you are using, lower usage might benefit from a higher standing charge and vice-versa.
Should I Get A Fixed Energy Deal In 2025?
The answer to this will often depend on your individual circumstances.
For domestic customers, the price cap has offered protection from higher costs meaning they have had little incentive to switch to a fixed rate deal.<
However, more suppliers are now entering the market with fixed rate deals which offer unit rates below the current price cap. As energy prices are expected to remain steady for the foreseeable future, moving to a fixed rate deal below the price cap could be a good option.
For business energy, things get much more complicated as it largely comes down the the circumstances of the business. Fixed-term contracts are great for business energy customers as it offers predictable cashflow.
It is a good idea to compare energy suppliers, and speak to one of our experts about fixed rate energy.
You can read more about the changes to the price cap here.
Business Energy Fixed-Rate Tariffs
Business energy is complicated at the best of times. With regulation changes, jargon, and wholesale pricing changes, business owners are in despair. Finding the right deal can often fall to the bottom of their to-do lists. Here at Love Energy Savings, we know how important it is to see the full picture. We have compiled a range of the best deals for business owners so that you can see whether it is worth switching.
Should Businesses Choose Fixed-Rate Tariffs?
Whether a fixed rate business energy deal is right for will depend on your individual requirements. In some cases, business owners can benefit from choosing consistent unit prices.
Here are some of the advantages and disadvantages of fixed business energy deals.
Advantages of Fixed-Rate Business Energy
There are lots of advantages of choosing fixed tariffs.
- Fixed tariffs are ideal for start-up businesses that are willing to lock in specific prices to create stable bills as their work flourishes.
- Fixed-rate deals are perfect for businesses that use a similar amount of energy each month. An example of this is a small retail shop on the high street or an office with a small team.
- 1-year fixed energy deals offer consistent bills across a short period of time. Business owners can reconsider their options at a later date.
Disadvantages of Fixed-Rate Business Energy
Although 2-year fixed tariff deals might seem like the best option, there are a few disadvantages that you should be aware of.
- If wholesale energy prices fall lower than fixed unit rates, you could end up spending much more than you need to on gas & electricity.
- A fixed rate tariff are available in 1, 2, and 3-year options. If you choose a 3-year fixed energy deal, you will not have the flexibility that your business might need.
- If you do not renew your contract or request a different contract, your supplier will put you on a standard variable tariff. Suppliers can change the unit prices for standard variable tariffs at any time. They are often referred to as the most expensive type of tariff.