When it comes to managing your business energy bills, one of the most important decisions you’ll make is choosing between a fixed or variable electricity tariff. Both options offer different benefits depending on your risk appetite, energy usage, and the current state of the UK energy market.
At Scalex Technology, we help UK businesses find the most cost-effective and reliable energy deals. In this guide, we break down fixed vs variable electricity tariffs, so you can decide which is the right fit for your business.
What Is a Fixed Electricity Tariff?
A fixed tariff means your electricity unit rate (measured in pence per kilowatt-hour) and standing charge stay the same for the length of your contract—typically 12, 24, or 36 months.
✅ Pros of Fixed Tariffs:
- Budget certainty – Easier to forecast bills
- Protection from price rises – Lock in rates when the market is low
- Great for long-term planning
❌ Cons of Fixed Tariffs:
- No benefit if market prices drop
- Early exit fees may apply
- Less flexibility if your usage or business size changes significantly
Best For: Businesses with steady electricity usage that value price stability over flexibility.
What Is a Variable Electricity Tariff?
A variable tariff changes with the energy market. This means your unit rate can go up or down, depending on wholesale electricity prices.
✅ Pros of Variable Tariffs:
- Potential for savings during market dips
- Flexibility – Usually no exit fees
- Easier to switch if better rates become available
❌ Cons of Variable Tariffs:
- Price volatility – Higher risk of bill spikes
- Harder to budget
- Less predictable over winter or in times of market instability
Best For: Businesses comfortable with market risk or those needing short-term, flexible contracts.
Fixed vs Variable: Key Comparison Table
| Feature | Fixed Tariff | Variable Tariff |
|---|---|---|
| Price Stability | ✅ Yes | ❌ No |
| Flexibility | ❌ Limited | ✅ High |
| Budget Control | ✅ Strong | ❌ Weak |
| Risk of Price Increases | ❌ Low | ✅ High |
| Potential Savings | ❌ Capped | ✅ Market-dependent |
| Contract Length | Usually 1–3 years | Short-term/rolling |
What’s Happening in the UK Energy Market in 2025?
In 2025, the UK energy market is still feeling the aftershocks of global price volatility and regulatory changes. While prices have stabilised compared to previous years, market uncertainty remains—especially with the push towards Net Zero and decarbonisation targets.
If you’re locking in a fixed rate, now might be a smart time before any major spikes. However, if you’re expecting rates to drop further, a variable tariff could offer flexibility.
How Scalex Technology Can Help
Navigating the business energy market can be overwhelming—but you don’t have to do it alone.
At Scalex Technology, we:
- Provide free, no-obligation energy quotes
- Compare fixed vs variable tariffs from trusted UK suppliers
- Help with contract negotiations and renewals
- Offer ongoing account management and bill analysis
Final Thoughts
Choosing between a fixed or variable electricity tariff depends on your business needs, energy usage, and appetite for risk. Fixed tariffs are ideal for stability and planning, while variable tariffs work for businesses that want flexibility and are willing to ride the market.
✅ Need help deciding?
Speak to an expert at Scalex Technology. We’ll analyse your usage, compare top UK suppliers, and help you pick the best option for your business.
📞 Get your free energy quote today.
