Exchange electricity or fixed price – which one saves more money?

Electricity price comparison: Which contract type is the most cost-effective?

When comparing exchange electricity and a fixed-price contract, it’s not enough to look only at the price. It’s just as important to consider your consumption – how and when you use electricity but also your own risk tolerance. 

Exchange electricity rewards those who can time their consumption

In the long run, exchange electricity is usually cheaper. However, its nature is volatile: there are days, weeks, and even months when the price rises above that of a fixed-price contract. 

The consumer plays a key role in the invoice: 

• Identify the biggest electricity consumers. Heating, hot water, the sauna, and charging an electric car have the biggest impact on the bill; small appliances have a surprisingly small impact on the total. 
• Time your consumption to cheaper moments. Charging the car, using the sauna and doing laundry are worth scheduling for the cheapest moments. 
• Follow weather forecasts. Electricity is often cheaper on windy and sunny days, while calm freezing days tend to push prices up. 
• Download the Vaasan Sähkö app. You can see spot prices for today and tomorrow and track your consumption and costs with 15-minute accuracy. 

“Usually, people become interested in exchange electricity at the latest when they buy an electric car. A car is a flexible electricity user: you can charge it during the cheap night-time moments, whereas, for example, a heating system does not offer the same flexibility.” – Jakob Frants, Sales Manager, Vaasan Sähkö

A fixed-price contract offers peace of mind and comfort

The price stays the same throughout the contract period, so you don’t have to worry about market fluctuations. Predictability brings peace of mind. However, a fixed price cannot compete with the cheapest exchange electricity hours. 

A fixed price contract is right for you if: 

• You want to know in advance how much your electricity will cost 
• Your everyday life is busy and you are not interested in following market prices 
• Your budget is tight and fluctuations in the electricity bill cause you stress. 

Electricity price comparison: How are spot and fixed prices formed?

• The spot price of electricity is based on market prices determined by the electricity exchange, Nord Pool. The spot price changes every 15 minutes according to supply and demand. 
• The price of a fixed-term contract is agreed for the entire contract period, usually one or two years. The price is based on electricity derivatives. A derivative is an estimate of future price levels, not a real-time market price. 

Which contract model has historically been cheaper?

Over the long term – at least two years – exchange electricity has on average been cheaper. However, the final cost for an individual household may have been higher or lower depending on their own consumption and how it was timed.

The energy crisis taught an important lesson

The energy crisis of 2022–2023 pushed spot prices exceptionally high. Those with fixed-price contracts avoided the sharp price spikes. A fixed price contract works a bit like an insurance: it protects you from surprises. 

Tip: If you have exchange electricity but want to switch to a fixed price contract, timing matters when entering a contract. Prices are usually lower, for example, when long-term weather forecasts predict mild conditions, rainfall has filled hydropower reservoirs, and the general geopolitical situation is calm. Fixed prices also tend to fall when consumption forecasts are low and there is plenty of capacity from low-cost production sources. 

Choosing an electricity contract is also about psychology

Many people weigh peace of mind against euros when choosing an electricity contract. Some worry about spot price spikes; others get frustrated about possibly paying a temporary premium with a fixed contract. 

In fact, the differences are usually around tens of euros per month at its highest, not hundreds. It’s also worth remembering that the energy price of electricity is only one part of the total invoice. Distribution fees and taxes are added, and their share can sometimes be up to half of the total. 

How to make an objective decision instead of an emotional one

Ask yourself: 

• How much would I save per month if I followed spot prices and timed my consumption? 
• How much of my monthly budget goes to my electricity bill? 
• Do price fluctuations affect my sleep or stress level? 
• Do I want to spend time optimizing, or on something else? 

“If following prices and optimizing saves around €20 a month but causes stress and sleepless nights, it’s worth considering whether it’s really worth it.” – Jakob Frants

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.