Fixed or Variable Energy: What to Choose?

When choosing an energy contract, you can choose from a fixed or variable tariff. In this energy guide the Belgian comparator CallMePower gives you all the information you need to choose between a fixed and variable energy contract.

Choosing a Fixed or Variable Energy Contract?

One of the choices you have to make when concluding an energy contract is between a fixed or variable energy contract. With a fixed rate, the energy price is fixed and with a variable rate, the price can differ per month or quarter. Both apply during the term of the contract.

Fixed or Variable Tariff in 2023?

Electricity prices and gas prices have fallen sharply in recent months, as a result of which several energy suppliers are once again offering fixed contracts. However, the CallMePower index shows that these contracts are generally more expensive than the current variable contracts. The expected annual prices of variable energy contracts are also lower on average than those of fixed contracts.

A fixed contract can offer security at the moment and save money in the unlikely event that energy prices rise again. However, opting for a variable contract will in most cases be a cheaper option.

Choose the Contract Based on Your Consumption

It is always recommended to compare the offers of all the energy suppliers based on your annual energy consumption when searching for a new contract. The cheapest energy supplier might differ, depending on your usage and the type of energy meter you have (single rate or dual rate).

When comparing, make sure to use the expected annual prices. In this case, the variable prices are calculated based on the expected market prices for energy in the coming year. This helps to compare fixed and variable tariffs easier.

Advantages and Disadvantages of Contract Types

Both fixed and variable tariffs have advantages and disadvantages. Below we explain exactly what the advantages and disadvantages of these contract types are and which contract you should choose at the moment.

Fixed Energy Contract Advantages

The biggest advantage of a fixed energy contract is that you agree on a fixed price for a certain period. The amount you pay per kWh for electricity and/or natural gas is therefore the same during the term of the contract. This can be a great advantage if energy prices rise sharply. Even at higher market prices, your energy bill will remain the same thanks to a fixed energy contract.

In addition, it can also be nice that you know what your monthly costs will be. You take out a fixed energy price, so you cannot be faced with any surprises.

Disadvantages Fixed Contract Energy

The biggest advantage of a fixed energy contract can also be a major disadvantage. If you have opted for a fixed energy contract and prices start to fall again, you will continue to pay a high price per kWh.

Because consumers in Belgium are completely free to switch energy suppliers, it is currently possible to switch to a cheaper energy contract. For this you will have to regularly compare energy rates.

Advantages Variable Energy Contract

The biggest advantage of a variable energy contract is that you can easily benefit from price drops. For this reason, concluding a variable energy contract is especially advisable when energy prices are very high. As soon as market prices for energy start to fall, the price you pay per kWh will also drop.

Due to the high energy prices, concluding a variable energy contract is currently the most attractive option. Moreover, most suppliers are currently (temporarily) no longer offering fixed energy contracts.

Disadvantages Variable Energy Contract

If prices start to fall, you pay less with a variable energy contract, but the same applies the other way around. If the prices of electricity and/or natural gas increase, your bill will also increase. It is therefore not advisable to conclude a variable energy contract if the market prices of energy are low.

Another disadvantage of a variable energy contract is that you are not sure how much you have to pay for energy. Because you do not pay a fixed price per kWh, you may pay a different rate for energy every quarter. This can be especially difficult for households tied to a budget.