Rising energy bills are forcing more UK businesses to take a closer look at how they buy their power.
Businesses do have options, from locking in a Fixed Contract to opting for a Market Tracker deal.
With a Fixed contract, your price stays steady, whilst a Market Tracker lets you benefit when prices drop – but your costs could rise if prices increase.
Both types have advantages and risks. The ‘best’ choice is dependent on your business’s risk tolerance and financial strategy.
Make the right choice and you can protect your business from unexpected price hikes, as one thing is guaranteed in the energy market – volatility.
Here’s a quick guide to help you decide:
What is a Fixed Contract?
A Fixed contract means you agree to pay a set price per unit of energy for a fixed period which is often one, two or three years.
Why Choose Fixed?
- You can lock in your unit price for longer.
- It encourages competitive and fair pricing, so you can optimise your overall spend.
- Better for businesses with tight cash flow.
What to Watch Out For
- Fixed means fixed for that term. If market prices drop, you’re stuck at your agreed rate.
- Some “fixed” deals have extra pass-through charges for network costs or green levies. Always read the fine print.
How a Market Tracker Contract Works
A Market Tracker contract follows the wholesale energy market. Your unit rate changes dependent on wholesale and other market costs. When market prices fall, you pay less, but if they rise, your bills go up too.
Why Choose Market Tracker?
- You can take advantage of lower rates when the market drops.
- The price you pay is reflective of what is happening in the wider energy market.
- An energy broker or manager can watch the market for you.
What to Watch Out For:
- Prices can change fast, and you need to plan for possible spikes.
- Not ideal if your cash flow is tight.
What About Renewables?
If you’re looking for more stability, on-site solar can help balance the risk. With a Power Purchase Agreement (PPA):
- You pay nothing upfront for the solar panels.
- You get a fixed, lower rate for the solar energy your system generates for 25 years.
- You only need to buy extra energy from the grid, on either Fixed or Market Tracker terms.
Solar can help you protect your business against rising energy costs and market volatility, giving you greater control over long-term energy spending.
Things to Consider
- Will your business be pressured if energy costs suddenly rise? Consider whether you have the time to monitor the market and make buying decisions at the right moment.
- Is steady cash flow more important than chasing potential savings when prices drop, and could combining a Fixed deal with on-site solar help lower your long-term costs?
- Every business is different, and the wrong contract could end up costing you thousands. It’s worth speaking to an expert and choosing the best option that best fits your energy use and long-term goals.
Get a Quote, Get Ahead
Ruby Energy helps UK businesses make sense of their choices and compare Fixed and Market Tracker options. We’ll show you how to secure better prices and how renewables like solar or REGO-backed tariffs can work alongside your deal. Let us build a strategy that fits your business needs.
Speak to Ruby Energy today to find the right energy deal and take control of your future costs.
