Two of the most common types of electricity and natural gas plans within most markets are fixed rate and variable rate. We will look into the pros and cons of each type to help you decide what plan is best for you.
Fixed vs. Variable Rates
Two of the most common types of electricity and natural gas plans within most markets are fixed rate and variable rate. In this blog, we look into the pros and cons of each type to help you decide what plan is best for you.
Fixed Rate Plans
A plan with a fixed rate has a contract term of at least three months in which the rate does not change throughout the contract term (there are a few exceptions). These exceptions could change the rate during your contract include changes in law or regulatory changes.
Fixed Rate Pros
- Price protection – Ability to lock in a low rate.
- Stabilizes budget
- Peace of mind – You know your rate will be fixed through your contract term (with few exceptions)
- Wide range of contract lengths to suit your preference
Fixed Rate Cons
- Can have rates that are higher than market prices if rates fall while you’re under contract
- Contracts have early termination fees if you want to end your contract before it expires
Variable Rate Plans
The plan with a variable rate can change over the contract terms. Variable rates change month-to-month based on market conditions.
Variable Rate Pros
- Can be cheaper than fixed rate plans
- Not locked into a long-term contract, which means you can lock into a fixed rate, when conditions are more favorable.
- No termination fee or penalty
Variable Rate Cons
- Rates can increase at any moment with notice
- Have to monitor rate
Which Rate Plan Suits You?
- Would you constantly monitor your variable rate if you have one?
- Do you like checking and analyzing the market daily?
- Would you be fine if your rate increased from month to month?
- Do you think energy prices will decrease in the next two years?
If you answered yes to most of these questions, then a variable rate would probably suit you.
If you answered no, then a fixed rate would probably be more appropriate.
Why Work with QFB Energy?
Choosing between fixed and variable rates is just the beginning. The real advantage comes from having a strategy built around your goals, risk tolerance, and market timing.
At QFB Energy, we help businesses navigate volatile energy markets, identify the right contract structure, and secure competitive pricing—without the stress of constant monitoring.
Ready to make a smarter energy decision?
Connect with our team today for a no-obligation consultation and see how much you could save with a tailored energy procurement strategy.
