Fixed energy contracts: how to know if it’s the right choice

Photo by Karsten Wurth - Unsplash

In recent years, fluctuating energy prices have made it a challenge for consumers to predict and manage their expenses. Luckily, fixed energy contracts are making a comeback in the Netherlands. These contracts, which lock in energy prices for a specific duration, offer stability and protection against drastic price changes. This article explores the comeback of fixed energy contracts in The Netherlands and highlights when it might be the right choice to opt for such a contract.

The resurgence of fixed energy contracts
Fixed energy contracts were once a very popular choice in The Netherlands, providing customers with the assurance of stable energy prices over an extended period. However, as the energy market evolved, variable-rate contracts became an interesting (and sometimes the only) choice. Because of the energy crisis, fixed energy contracts were barely available or offered at very steep prices.

From the 1st of June 2023, ‘normal’ fixed energy contracts are finally back. This means that lots of people are quickly committing to one of these long-term contracts to lock in the current rates. You might’ve already heard of Dutch terms like ‘energie vergelijken’, which helps to make sure you find a contract that best suits your needs.

When to consider a fixed energy contract
While fixed energy contracts can provide peace of mind and financial stability, they may not be the ideal choice for every consumer or situation. Here are a few scenarios when opting for a fixed energy contract would be beneficial:

  • Long-term stability: if you value stability and want to avoid unexpected price hikes, a fixed energy contract can be a good way to go. By locking in energy prices for a set period, you protect yourself from market volatility and fluctuations in what the Dutch call ‘energietarieven’. This gives peace of mind and helps with financial planning.
  • Easier to compare: a fixed energy contract makes it a lot easier to compare energy suppliers to make sure you’re getting the best rates. Flexible prices based on changes in the energy market can go up a lot because of external factors, meaning you’ll never fully be able to predict what prices you’ll be paying and which supplier will be the cheapest.

Considerations before committing
While fixed energy contracts offer advantages, it’s important to consider a few factors before making a decision:

  • Contract duration: fixed energy contracts typically have a fixed duration, mostly ranging from one to three years. It’s a good idea to look at your lifestyle and current situation to determine if you are comfortable committing to a contract for that amount of time. If you anticipate a change in your energy usage or if you’re an expat planning to move soon, a fixed contract may not be the best fit.
  • Early termination fees: fixed contracts may have penalties if terminated before the contract runs out. Understanding the terms and conditions is important in order to avoid extra fees. Be sure to evaluate your long-term plans before signing up.

Finding the right energy contract
The resurgence of fixed energy contracts in The Netherlands offers consumers an opportunity to regain stability and certainty in their energy expenses. Ultimately, the choice between fixed and variable energy contracts depends on individual circumstances, risk tolerance, and how much you value financial stability.