Fixed or indexed? Choosing a plan that matches your load
The cheapest headline rate is rarely the cheapest plan. The right structure depends on how, and when, you actually use power.
Key takeaways
- Fixed buys certainty; indexed buys exposure to the market, up and down.
- The right answer depends on your load shape and your appetite for bill variability, not on which looks cheaper today.
- Plan type and contract length should be decided together, from your meter data.
Ask three retailers for a quote and you'll get three different "best" plans, each genuinely the cheapest, under a different set of assumptions. The honest answer to "fixed or indexed?" is: it depends on your load. Here's how to think it through.
Fixed rates: paying for certainty
A fixed plan locks your per-kWh rate for the contract term. Budgeting is simple, and you're insulated from price spikes. The trade-off is that you're also locked out of falling prices, and the retailer prices in a risk premium for carrying that certainty on your behalf.
Fixed tends to suit you if you value predictability, have steady consumption, or can't easily absorb a surprise on the monthly bill.
Indexed rates: riding the market
An indexed (wholesale-linked) plan moves with the market. When prices fall, you benefit immediately; when they spike, your bill follows. It can be cheaper on average, but it asks you to tolerate variability month to month.
Indexed isn't cheaper or riskier in the abstract, it's only right or wrong relative to your tolerance for a moving bill.
Time-of-use: only if you can shift
Time-of-use structures reward consumption at off-peak hours. They pay off, but only if your operation can genuinely move load. A warehouse that can run chillers overnight is a candidate; an office that runs nine-to-five is usually not.
Start from the load, not the rate
Every one of these decisions should begin with the same input: your actual consumption profile across the day, week, and season. Choose the structure that fits the shape of your demand, then let tenure and timing follow.
- Steady, predictable load, low tolerance for surprise → lean fixed.
- Flexible operations, healthy risk appetite → indexed may win over time.
- Real ability to shift load off-peak → time-of-use is worth modelling.
This is exactly the analysis a bill audit puts numbers behind, before you sign anything.
