s stated earlier, energy suppliers offer different types of gas and electricity tariffs designed to meet the needs of their customers. However, these tariffs significantly impact your gas and electric quotes. As such, it is essential that you carefully study the different types of energy tariffs to find the best quote for your household.

Fixed-rate tariff

A fixed-rate tariff offers a predetermined energy price for a specific period, typically 12 – 18 months. The tax has many benefits, including protecting customers against unexpected rises in energy costs. Additionally, subscribers on fixed tariffs can keep control of their budgets.

Despite the numerous benefits of fixed-rate tariffs, you should be aware that you may be required to pay early exit charges if you decide to switch providers before the end of your contract. However, you can switch to a new provider or tariff at the end of your fixed rate tariff without incurring an exit fee.

Pros and cons of fixed rate tariffs

Fixed-rate energy tariffs have their pros and cons. Let’s look at some of them to help you decide on the best gas and electricity deals for your household or business.

Pros of fixed rate tariffs

On the positive side, fixed tariffs have the following advantages.

• Fixed-rate tariffs are typically cheaper in a stable market than variable-rate tariffs.
• Customers on fixed tariffs are not affected by sudden changes in energy prices.
• It offers regular energy costs, helping you to be in control of your budget.

Cons of fixed rate tariffs

Despite having some impressive advantages, fixed tariffs have the following drawbacks you should know beforehand:

• Users on fixed-rate tariffs may not benefit from sudden drops in energy prices
• Ofgem’s energy price cap will not protect you if you sign up for a fixed tariff.
• You may be required to pay exit charges if you decide to leave your contract early.

Variable tariffs

Energy costs on variable tariffs fluctuate according to the prevailing market conditions. Because of this, customers may benefit from a drop in prices. However, you should be aware that you may end up paying higher prices if there is a significant price increase.

Customers on variable tariffs can easily switch providers without paying exit charges. As such, customers can take advantage of favourable market conditions and switch to cheaper deals. 

Pros and cons of variable tariffs

Variable energy tariffs have their pros and cons that you should consider before signing up for one. Let’s look at some of the advantages and disadvantages of variable tariffs. 

Pros of variable tariffs

• Ofgem’s energy price cap protects variable tariffs. Because of this, there is always a limit on how much your supplier can charge per unit in the case of a significant rise in energy costs.
• Customers on variable tariffs can benefit from price drops by switching to cheaper deals.
• You can change providers anytime, as there are no early exit charges.

Cons of variable tariffs

Contrarily, variable rates have the following disadvantages you should be aware of. 

• Your energy bill will go up if there is an increase in energy prices
• Variable rates are typically more expensive than fixed rates in a stable market.
• Energy price fluctuations could make budgeting more difficult.

Dual fuel tariffs

Dual fuel deals bundle gas and electricity from the same supplier, thus reducing the number of bills you must manage. Let’s look at some of the pros and cons of dual fuel tariffs you should know beforehand.

Pros and cons of dual fuel tariffs

Like every other tariff, dual fuel packages have ups and downs that you must consider carefully. Some of these have been outlined below to help you make informed decisions.

Pros of dual fuel tariffs

• Some of the benefits of dual fuel tariffs include the following:
• It makes it easier to manage bills.
• Dual fuel tariffs are generally cheaper, as many suppliers offer discounts for bundled packages.
• There are many providers to choose from 

Cons of dual fuel tariffs

On the negative side, dual fuel tariffs have the following drawbacks you should know beforehand.

• You may be required to pay an early exit rate if you are on a fixed dual fuel tariff and want to switch providers or plan before the end of your contract.
• Different suppliers for energy and gas could save you more money than discounts on dual fuel tariffs.
• Dual fuel tariffs are not usually cheaper and could be more expensive in some cases.

Prepayment tariffs

Prepayment tariffs allow customers to pay upfront before using electricity or gas. You must top up your metre by purchasing a key, token, or card online before using energy. The tariff gives users more control over energy costs but is generally more expensive than variable or fixed-rate tariffs. 

Pros and cons of prepayment tariffs

Pros

• Prepayment tariffs do not require passing a credit check or setting up your bank account.
• There is no room for unexpected bills
• You will only be charged for the energy you used
• It gives you more control over your energy costs 

Cons

• You will run out of gas or find yourself without electricity if you forget to top up your prepayment metre and misplace your card, token, or metre key.
• It is more expensive than other energy tariffs.
• The best energy tariffs may not be available to customers on prepayment plans.

Green energy tariffs

The green or renewable energy tariff is a unique plan that allows you to choose whether you want a complete renewable energy supply to your home or a combination of renewable and non-renewable energy. Green tariffs are not only sometimes the most expensive energy quote, but they could also offer one of the best deals.

Pros

• Green energy tariffs are good for the environment and can help to reduce global carbon emissions.
• Signing up for a green energy tariff is a sustainable choice, as renewable energy is the future of energy.
• Many suppliers are offering renewable energy tariffs. As such, you have many options to choose from.

Cons

• Some green energy tariffs are only partially renewable. As such, it is essential that you look for one that is more beneficial to you and the environment. 
• Some green energy suppliers deceive subscribers by exaggerating the environmental benefits of renewable energy tariffs.

Economy and time-of-use tariffs 

Energy suppliers offer Economy 7 and Economy 10 tariffs to subscribers who wish to get cheaper deals during the off-peak hours for seven or ten hours a day. Notably, those on Economy 7 have their off-peak hours calculated between midnight and 7 a.m. In contrast, Economy 10 is estimated at set times throughout the day.

There is also a time-of-use tariff, which is designed for electric car owners to enable them to charge their vehicles at night. You should know that while time-of-use tariffs can be cheap, you will be charged higher if you use it outside the stipulated time.

 Pros

• Using it during off-peak times could save you lots of money.
• Off-peak tariffs come with a special metre to monitor rates.

 Cons

• You will be charged higher energy rates during peak hours than other tariffs.
• It is unsuitable for anyone who uses more energy during the day.
• You will be required to purchase a special metre.
• Trying to arrange your energy usage during off-peak hours could be challenging.
• Switching to an economy tariff could be challenging.

 Smart metres and online or paperless tariff

Smart metres and online tariffs allow you to manage your energy account online without receiving any paper in the form of a bill or letter. The tariff is typically cheaper. However, you should note that you need a smart metre that automatically sends your metre readings to the supplier.

Pros

• It does not involve receiving paper bills; your energy account will only be managed online.
• It is friendlier to the environment.
• You can easily manage your account on the supplier’s website or mobile app.

 Cons

• It is unsuitable for anyone needing to file monthly paper bills, as all energy bills are sent online.
• Many online tariffs need customer call centres. As such, it can be frustrating if you encounter any challenges.

Unlimited energy tariffs

An unlimited energy tariff is one of the new plans introduced by energy suppliers. It grants customers unrestricted access to gas and electricity for one year. The cost, however, is determined by the supplier during signup. Your supplier may ask how much gas and electricity you use to enable them to work out your energy quote.

The energy supplier will then fix your energy cost for one year, regardless of how much energy you consume. An unlimited energy tariff is suitable for anyone on a budget, as you can know how much you will spend on energy beforehand. However, it is essential that you know you may end up paying higher costs if you use less energy than expected.

 Pros

• It offers the best value to anyone who uses lots of energy
• It makes it easier to plan your finances, as you will know your energy costs ahead of time.

 Cons

• It could discourage you from reducing your energy usage
• There are only a few suppliers that offer unlimited energy tariffs
• You may end up paying for energy you don’t use.