Choose wrong and overpay thousands. Our expert analysis reveals which tariff type saves 90% of SMEs money while protecting against market volatility.
Contact UsLocks in your unit rates & standing charges for 1–5 years.
✅ Prices stay the same throughout contract
✅ Protection from wholesale price rises
✅ Predictable budgeting & cashflow
✅ Exit fees usually apply for early termination
Rates track wholesale market prices & can change frequently.
✅ No long-term price lock
✅ Exposure to market volatility
✅ Rates can change monthly or more often
✅ Usually no fixed exit fees
| Feature | Fixed Tariff | Flexible Tariff |
|---|---|---|
| Price Certainty | ✅ Yes - Locked for contract term | ❌ No - Changes with market |
| Protection from Price Spikes | ✅ Full protection | ❌ No protection |
| Benefit from Price Drops | ❌ No - Rates remain fixed | ✅ Yes - Follows market down |
| Budget Predictability | High - Consistent monthly costs | Low - Variable monthly costs |
| Risk Level | Low - Controlled exposure | High - Uncontrolled exposure |
| Best for Most SMEs | ✅ Yes - 90% of businesses | ❌ No - Only 10% of businesses |
Compare total cost including standing charges and unit rates. For 90% of SMEs, fixed tariffs provide lower overall costs when factoring in risk protection and budgeting certainty. Flexible headline rates are misleading without volatility context.
For most businesses in 2026, fixed tariffs are cheaper overall due to competitive supplier pricing and risk premiums in flexible rates.
Suppliers price fixed deals aggressively to win business. Flexible tariffs often include a "risk premium" for market exposure.
Attempting to "time the market" with flexible tariffs rarely succeeds. Businesses waiting for price drops often miss savings windows.
Over 3-year periods, fixed contracts outperform flexible for 80% of SMEs when considering price spikes and volatility.
Uncontrolled price rises hit cashflow directly. Business energy has NO price cap protection. Flexible tariffs can increase dramatically during cold winters, geopolitical instability, or supply shortages. A 50% price spike could devastate SME margins without warning.
Simple Rule: Ask "If my energy prices doubled next quarter, would my business cope?" If NO → choose fixed. If YES → flexible might be suitable.
✅ You want predictable monthly costs
✅ Energy is a major overhead
✅ You don't track wholesale markets
✅ You're a small/medium business
✅ You're risk-averse
✅ You value budgeting certainty
DESCRIBES 90% OF UK SMES
✅ You're a large energy user (50,000+ kWh)
✅ You have in-house energy expertise
✅ You can tolerate price volatility
✅ You actively manage procurement
✅ You use hedging strategies
✅ You monitor markets daily
DESCRIBES ONLY 10% OF BUSINESSES
False. Only true in specific falling market conditions. Over typical 2-3 year contracts, fixed usually wins.
Unlikely. Even energy traders with sophisticated tools struggle. SMEs lack resources for market timing.
False. Fixed tariffs are competitively priced and provide valuable price certainty for SMEs.
False. Smart meters work with both tariff types. More data ≠ lower costs with poor timing.
Micro-businesses save £300–£700 | Small offices & shops save £800–£2,000 | High-usage SMEs save £3,000+
Choose the tariff that protects your margins. For 90% of SMEs, fixed business energy provides the optimal balance of cost control and risk management.