What Is The Best Month To Start An Electricity Contract? (Easy method)

This article will assist you in understanding What Is The Best Month To Start An Electricity Contract? Choosing an energy contract for your company can be a complicated procedure. Navigating the world of gas and power contracts is complex, even for the most experienced and assured of clients, especially during a global pandemic.

It can be challenging to determine which energy contract is appropriate for your company and its particular circumstances when so many options are available on the market. Whatever you need, Utility Team can help because we are professionals in both long and short-term gas, water, and electricity contracts.

It can feel like a minefield when a company approaches the energy market with the goal of getting a new energy contract. There are more than 30 vendors to select from in the UK, along with a wide range of alternative rates and contract lengths.

What factors influence a company’s decision to sign a short-term (1-2 years) or long-term (3-5 years) contract? What are the key factors to consider when evaluating a contract for gas, electricity, or other forms of energy?

What Is The Best Month To Start An Electricity Contract?(Easy method)

Many energy suppliers are eager to contract with you to supply electricity at a set cost. Your power rate will remain the same when you “lock in” that price for your contract term. What happens to market rates, which vary depending on the season, the hour of the day, and other variables, is irrelevant.

Best Month To Start An Electricity Contract

You have a constant and predictable price for budgeting if you lock in pricing. When power rates often decrease, the fall or spring is the most fantastic time of year to lock in rates. Consider researching long-term price trends in the market.

Short-Term And Month-To-Month Electricity Contracts

Typically, short-term electricity supply agreements last for less than a year. Electricity plans for six, three, and twelve months are popular options. Your costs under a short-term power contract could remain the same or change based on the market, depending on your selected plan.

For instance, because the rate you pay each month may change, monthly power plans are also referred to as variable-rate plans. You’ll need to compare pricing more frequently with these kinds of contracts. Depending on when in the year you initiate or renew your contract, this could be beneficial or detrimental.

The Advantages Of A Short-Term Electricity Contract

It will be easier for you to choose the power contract that best suits your needs if you know the advantages of short-term and long-term contracts. Some benefits of a short-term electricity contract include the following:

  • More chances to enroll when rates are low. With a month-to-month power plan, you may be better able to capitalize on market trends and sign your contract when electricity prices are at their lowest. If market prices decline, you can acquire a cheaper rate by keeping an eye on the variables that affect power rates, such as the season and consumer demand.
  • More adaptability. You can look around for lower rates in a short-term power contract if they are available and alter your arrangements more frequently. Short-term power contracts could be a suitable choice if you travel a lot because they involve less commitment than long-term ones.

The Risks Of A Short-Term Electricity Contract

Despite the benefits, there are a few disadvantages to short-term energy programs to take into account. The following are some dangers associated with a short-term electricity contract:

  • The possibility of more excellent renewal rates. There is no assurance that you will stick with your month-to-month power plan after signing up for one at a low rate. You can be forced to pay a higher rate if the market prices increase next month.
  • The need for frequent renewal. Long-term contracts must be renewed less frequently than short-term agreements. This makes it simpler to forget your renewal date on accident.
  • More difficult to create a budget. It might be challenging to forecast your renewal rates because so many elements influence market prices. With a short-term electricity contract, it is challenging to create a budget because of this uncertainty.

Long-Term Electricity Contracts

Contracts for the long-term power supply can span from 12 to 60 months or 1 to 5 years. Long-term energy plan lengths frequently include 12-month, 24-month, and 36-month contracts. These electricity contracts often feature rates that don’t alter based on fluctuations in market prices. Long-term contracts entail more outstanding commitments than short-term agreements. However, the steadiness of your electricity cost each month increases with this commitment.

The Advantages Of A Long-Term Electricity Contract

You can gain from a long-term electricity contract in exchange for a more significant commitment by:

  • Predictable and stable supply rate. You pay a set supply rate throughout the agreement in a long-term contract. Therefore, you won’t have to worry about renewing your contract or changing your supply rate if market pricing increase during high-demand seasons. Additionally, this regularity makes it simpler for you to create a cost budget.
  • Possibility of increased savings. If you sign a long-term electricity contract with low prices, you’ll maintain that rate for the entire agreement period. This allows you to save money over time, perhaps.
  • They are saving time on rate renewals and shopping. Long-term power contracts also save you from comparing rates and renewing your agreement as frequently as you would in short-term agreements. You no longer need to compare electricity supply rates frequently, saving you time and effort.

The Downsides Of A Long-Term Electricity Contract

Although a long-term contract offers stability, there are several drawbacks to this kind of arrangement. Some drawbacks of a long-term electricity contract include the following:

  • Is unable to profit from falling market prices. Without breaking it, you will have fewer opportunities to compare prices in a long-term electricity contract. Due to this lack of flexibility, you can be forced to accept a higher rate if market prices decline.
  • A higher level of dedication. The commitment required for long-term electricity contracts is more significant than short-term ones because they can run up to 60 months. If you’re unhappy with your supply service, transferring energy providers mid-contract will be more complicated (and may incur penalties).

Is A Short-Term Or Long-Term Electricity Contract Better?

We’ve examined how these kinds of electricity contracts operate, but which is preferable—short-term or long-term contracts? The most advantageous option will mostly rely on your circumstances and your household’s demands, as each plan have a unique set of features. Your choice may be influenced, for instance, by the season of the year you sign your contract and the local market prices at the time.

The main distinction between short-term and long-term electrical programs is stability. A long-term agreement provides a consistent supply rate and a fixed monthly cost. You can create a budget and anticipate your future energy bills as a result.

Is A Short-Term Or Long-Term Electricity Contract Better

The certainty of knowing your electricity costs won’t suddenly skyrocket is a major selling point for signing a power supply contract for a lengthy period. It is one of the most well-liked programs among residential consumers.

A month-to-month or short-term electricity supply contract will provide a different level of security. Saving money with a short-term strategy is doable if you’re willing to take on greater risk. However, it will take more effort to keep up with market trends and frequently shop for the best deals. There still needs to be an assurance that you will find a lower rate and save money.

Whatever option you choose, it’s critical that you comprehend the terms of your energy supply contract and carefully review them before enrolling. Rushing to make a choice could result in high costs or subpar service for your contract term. Ask your provider any questions about the plan(s) you are thinking about without hesitation. Your contract’s fine print and some of the typical energy phrases will be explained to you by a dependable energy provider.

Secondary Factors To Consider

When determining how long to fix your rates for, there are other secondary elements to take into account in addition to the primary and immediate considerations:

  • Duration of stay: You don’t look at how long you’ve been at a place when you look at the time; rather, you look at how long you plan to stay there. How long will you be residing there? If you want to leave the residence in a year or two, fixing an energy contract for five years would be unnecessary. To save you as much time and worry as possible, a long-term contract is generally something to consider if you intend to work there for at least three to five years.
  • Transfer of business ownership: If there are any intentions to have the company acquired by another group or individual, this will affect who is responsible for paying the invoices. This implies that any existing energy contracts (for gas, electricity, or both) would be void. This indicates that this is a circumstance in which a shorter-term contract would be more advantageous. However, a longer-term energy contract may be advantageous if there are no plans to transfer the business’ ownership.
  • New to the market: Choose a one-year contract if your company is new and unsure of your anticipated usage. You’ll be able to make a more informed choice when you go back to the market a year from now and have an idea of your annual usage.


I hope the above information is helpful for you about What Is The Best Month To Start An Electricity Contract? Finally, there are no predetermined principles or criteria for adjusting your energy contracts.

However, Utility Team has learned through experience that the advantages of a longer-term contract significantly outweigh the drawbacks. Because of the COVID pandemic’s impact on the energy markets, long-term contracts provide long-term price protection, which is crucial for most, if not all, enterprises.

Frequently Asked Questions

What months is electricity cheapest?

On holidays and weekends (including Memorial Day, Independence Day, Labor Day, and Thanksgiving), Christmas Day, and New Year’s Day, power companies typically impose off-peak use prices.

What is the best time to switch energy providers?

When your fixed contract expires and you’re about to be switched to the energy provider’s standard variable pricing, it would be the optimum time to transfer energy suppliers. This is the worst situation as they frequently have the highest charges available.

What’s the best time to save electricity?

Energy is less expensive on weekdays before 4 p.m. and after 9 p.m. Every weekend and the majority of holidays have lower energy prices.

Is electricity cheaper at the beginning of the month?

The cheapest electricity block is the first one. Customers will gradually purchase more electricity from block two, which is more expensive, as they use more electricity during the month.

Is pre-paid electricity cheaper?

Pre-paid electricity users are more conscious of how much power they use and are more aware of how to conserve power to avoid running out. She claims that it is more expensive because pre-paid electricity is sold to the customer at the highest tariff.

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