Here’s a clear, neutral breakdown to help you decide whether fixing your business energy prices is a good idea for you.
However, just to be clear: This is not financial advice!
Just the practical pros/cons businesses typically consider.
✔️ Pros of Fixing Your Business Energy Rates
1. Price certainty & budget stability
You lock in your unit rate and standing charge for the whole contract.
Great if you need predictable cash flow, fixed overheads, or long-term budgeting.
2. Protection from market spikes
If wholesale prices rise (due to winter demand, geopolitical issues, supply risks, etc.), your business is shielded.
3. Easier forecasting
Fixed prices make it simpler to produce accurate forecasts, set product prices, or plan expansions.
4. Straightforward contract
Fixed contracts are simple: same price every month regardless of market movement.
(Though non-commodity charges can still vary if the contract is “pass-through,” so check terms.)
5. Often better for small or micro businesses
Smaller users without energy managers generally prefer stability over chasing market dips.
❌ Cons Of Fixing Your Business Energy Rates
1. You won’t benefit if prices fall
You’re locked in, even if wholesale prices drop significantly.
2. Early termination fees
Fixed contracts usually have no cooling-off period for businesses.
Changing early can be costly or impossible.
3. You might lock in at a “bad” time
If the market is unusually high when you fix, you might secure a rate that looks expensive later.
4. Less flexibility for reducing consumption
Some fixed contracts include:
- volume tolerance clauses
- penalties for huge over/under-consumption
Relevant for large or volatile businesses.
5. Ties you in for 1–3 years
Harder to take advantage of short-lived market dips or promotions.
When fixing is usually a good idea
You may want to fix when:
- Wholesale prices are stable or relatively low.
- Your business needs predictable costs.
- You don’t have time or tools to manage market volatility.
- You expect consumption to remain fairly stable.
- Risk avoidance is more valuable to you than chasing possible savings.
When staying on a variable/pass-through/flexible deal might make sense
You may want to stay flexible when:
- You believe prices may fall soon.
- You’re on very high out-of-contract rates and expect a better deal shortly.
- You’re a large user with HH meters and actively manage your procurement.
- You can handle short-term price swings.
- You might relocate or close a site soon (to avoid termination penalties).