The Two Main Plan Types
When shopping for energy suppliers, you'll see plans labeled as either "fixed" or "variable." This is one of the most important decisions you'll make.
Fixed-Rate Plans
Your rate is locked in for the duration of the contract (typically 12-36 months). Your bill stays the same month to month (unless your usage changes).
Pros:
- Predictable monthly bills
- Protected if market rates rise
- Peace of mind
Cons:
- You miss out if rates drop
- Usually a higher starting rate (supplier pricing in the risk)
- Early termination fees if you want to cancel
Variable-Rate Plans
Your rate fluctuates based on market conditions, typically reset monthly. Your bill varies from month to month.
Pros:
- Can be cheaper if rates drop
- No early termination fees (usually month-to-month)
- Flexibility to switch anytime
Cons:
- Unpredictable bills if rates spike
- Often more expensive if the market rises
- Requires active monitoring
Which Should You Choose?
Choose Fixed if: You want predictability and don't want to think about energy shopping. You're risk-averse. You're locking in a rate that's substantially cheaper than your current rate.
Choose Variable if: You're comfortable with monthly changes. You monitor rates regularly and plan to switch if it gets too expensive. You think rates might drop and want to benefit from that.
Pro tip: EnergyMonkey shows you both options ranked by your projected annual savings. Use that to make the best choice for your situation.