Do you have the right electricity contract? Study and compare your alternatives

Are you unsure if your current electricity contract is suitable for you? Jakob Frants, Sales Manager at Vaasan Sähkö gives advice on how to find out your consumtion, compare contracts, and identify the moments when it’s worth changing contracts.

Study your yearly consumption – how much and when do you use electricity?

When you know how much electricity you consume yearly and during which times of the day, you can realistically compare contract.

Do at least these two things: 

1. Study your monthly, daily, and even quarter-hourly consumption in the Vaasan Sähkö app or online service. This gives you an idea of the size of your annual electricity bill. Compare your consumption with the previous year to see changes on a yearly basis.
2. Find out when your consumption peaks occur. Do you use more electricity in winter or in summer? Is your usage concentrated during the day or in the evening, and do you also have nighttime consumption?

In a two-room flat with a sauna, the annual electricity consumption can be around 2,000 kWh, whereas in a detached house with electric heating, the consumption might amount up to 20,000 kWh per year. If your electricity usage is low, your chances to save on the final bill are limited. Sometimes skipping a couple of cappuccinos saves more euros. When consumption is high, even a small difference in the price per kWh can mean a great deal of euros a year.

Quarter-hourly consumption data helps you assess the suitability of exchange electricity. Prices are often lowest at night, on weekends and in summer. If your consumption is concentrated in winter months or weekday mornings and evenings, price fluctuations in exchange electricity can increase your bill – and cause stress.

Identify the components of your electricity bill – what can you really influence?

The total price of electricity consist of three parts: energy, distribution, and taxes.

1. Energy: The price of electricity is based on the energy you buy from the electricity company. This part is often about 30–40% of the total bill, and this is the part you can influence. The price of energy usually also includes a fixed monthly fee, i.e. a basic charge.
2. Electricity distribution: Distribution is handled by the local electricity network company. The distribution fee usually includes a basic charge and a consumption-based price per kWh. You can’t negotiate the distribution price, but you can influence it by choosing the right measurement method: with general electricity, the price is the same around the clock, and with night-rate electricity, the distribution fee is cheaper at 22.00–07.00.
3. Electricity tax: The government collects this tax, which the consumer can’t directly influence, but lower consumption will, of, course, also reduce the amount tax.

Jakob Frants’ tip: Out of the contracts Vaasan Sähkö is offering, Basic Electricity and Fixed are also available with night-rate electricity.

Look at the whole picture, not just a single price

When comparing electricity contracts, it’s not worth focusing only on the price per kWh. More important is to look at the wider picture:

• annual consumption
• timing of consumption 
• contract price structure
• your own risk tolerance

Jakob Frants’ tip: The cheapest price per kWh does not automatically mean the lowest annual electricity bill. That’s why analyzing your consumption data is the best starting point before comparing contracts.

Consider whether the contract type matches your lifestyle

When choosing an electricity contract, it’s essential to consider whether the contract type suits your everyday life and how actively you want to monitor electricity prices or time your consumption.

Exchange electricity suits those who actively monitor and time their usage

The price of exchange electricity varies every fifteen minutes according to the electricity exchange. Exchange electricity contracts suit you if you are interested in tracking fluctuations and can time your usage to cheaper periods.

The benefits increase if you have a large boiler, the heating of which you can time to cheaper periods and use around the clock. Likewise, if you have an electric or hybrid car, the charging of which you can time.

A fixed-price contract suits those who value peace of mind

In a fixed-price, fixed-term contract, the price remains the same throughout the contract period. This brings predictability and peace of mind, as you know in advance what electricity will cost.

Although the price may not always be the lowest on the market, for many people a steady cost is more important than constantly monitoring prices.

A hybrid contract can be a good compromise

Hybrid contracts combine the best features of fixed-price and exchange electricity. Vaasan Sähkö Influencer contract includes an exchange electricity-based component. Its amount depends on whether electricity is used during the cheaper or more expensive quarters of the month. You have the chance to influence your final bill, but you don’t bear the full price risk of exchange electricity.

Three signs that it’s worth checking or changing your electricity contract

1. The contract constantly causes stress

If you find yourself thinking about electricity prices day and night, it can imply that your contract doesn’t suit your everyday life.

2. Life situation changes

Moving, new family member, upgrading your heating system, or buying an electric car are good reasons to check whether your electricity contract is still suitable or if it needs updating.

3. World events

The price of electricity responds, for example, to maintenance of nuclear power plants, exceptional weather conditions, and international crises and conflicts.

Even if your own consumption remains the same, the changing environment may make it sensible to update your contract. For instance, you may wish to fix the price for a 12 or 24-month period.

Expert: Jakob Frants, Sales Manager, Vaasan Sähkö. 

Frants is responsible for electricity sales to private customers and small businesses, product pricing, the development of contract types, and Smart Home services.