All energy providers offer energy plans designed to suit different circumstances and budgets. Whilst choice is always a good thing, it can be tricky sorting out which would suit you best. Each plan differs in its rates, method of payment and the duration of contracts. When you begin your search it’s helpful to know your maximum budget and total energy requirements.
Energy plans are of these types:
Fixed-rate plans offer you a stable or fixed rate throughout the contract term. This rate is based on your expected consumption and usually stays stable regardless of inflation or deflation in the energy rates. This plan is ideal for staying in budget and planning long term savings. The biggest drawback of these plans is that your energy bill is based on your maximum consumption per month and in most instances, you are paying for the extra units over what you have consumed. In rare cases, the supplier also increases the energy bills during the term if the energy rates exceed a predetermined limit.
The energy bills in variable-rate plans differ from one month to another. These plans are flexible and your energy bill is based on current energy rates and your recent energy consumption. The biggest benefit of this plan is that pay only for the units you have consumed and you can save more energy to save more on bills if you are tight on budget. The major drawback is that it includes higher rates per unit if you consume energy during peak hours.
Time-of-Use plans are not common and offered by only a few suppliers. This plan is very flexible and has different energy rates for different times of the day. The greatest benefit is that you can manage your energy bills day to day by using energy at off-peak hours.
The energy bills in the indexed-rate plan also fluctuate and they are more complex than variable-rate plans. Instead of following the energy consumed and energy rates, companies apply a mathematical formula to calculate the energy bills. There are various complications in that formula that must be understood well before signing up for indexed-rate plans.
Flat-rate plans are like fixed-rate plans where your energy bills are fixed based on your previous energy consumption history. However, you have to pay extra if you exceed your fixed limit of energy consumption.
As you can see, you can find different plans, which can be quite confusing, and that is the reason why it makes great sense to use the internet sensible and join a comparison site like Usave.co.uk. You can use Usave.co.uk to compare energy suppliers and what deals they have to offer. If you’re already aware of the plan that works for you – flat-rate, fix rate, or variable rate – you can use it in your preferences while making a comparison. So, be sure to use the best online comparison sites where plans are sorted and presented clearly for a more direct like for like comparison.