Fixed versus indexed electricity: which risk are you choosing?

Responsible editor: Nicholas John Hopes, operator of Rayte.eu. Tariff names are not standardised. Always read the price formula and contract summary rather than relying on the words “fixed”, “stable”, “indexed” or “market”.

The real choice is how price changes reach the household. Some contracts hold the energy rate for a term. Some vary by time block. Some reference wholesale or another index. Regulated charges and taxes can still change even where a supplier describes the energy component as fixed.

1. Define the four common structures

Flat fixed energy price: one energy rate applies across the day for the stated term, subject to the contract’s exclusions. Fixed time-of-use: several predefined energy rates apply in different periods. Indexed or dynamic: the energy calculation follows a published index or hourly market value plus stated costs. PVPC: the regulated small-consumer route for eligible supplies through a reference supplier, calculated under the current regulated methodology.

A tariff can combine features. A product may have an indexed energy term and fixed monthly management fee, or a fixed energy term with variable regulated components. Write down the formula component by component.

2. Ask what is actually fixed

Record the energy rate, power rate, fixed period, price-review date and permitted changes. Check whether the supplier can pass through regulated charges, taxes or other legal changes. Note the renewal method: a good first-year price can become expensive if it automatically moves to a different rate.

For discounts, identify the undiscounted rate, percentage, duration and conditions. A discount tied to maintenance or loyalty should be tested after the service fee is added.

3. Deconstruct an indexed formula

An indexed offer should identify the reference price, settlement interval, supplier margin or management fee, losses and other included costs. Ask whether the formula uses the day-ahead market, another reference, a monthly average or the household’s interval consumption. The same market can produce different bills under different formulas.

Under Spain’s 2026 general supply rules and related CNMC guidance, consumers should receive clearer pre-contract information. For a contract indexed to the hourly daily market, the supplier must provide a monthly bill estimate. Keep that estimate with the formula and test the assumptions rather than treating it as a guarantee.

4. Measure household flexibility

Indexed and time-of-use products can reward a household that can move EV charging, water heating, pool pumping, laundry or battery charging. The relevant measure is not “being at home in the day” but how much consumption can be shifted without creating inconvenience or new peaks.

Use distributor interval data to estimate consumption by hour or tariff period. Model a cautious scenario where only genuinely flexible loads move. Do not assume that every kWh will occur at the cheapest interval.

5. Compare risk as well as expected cost

Questions that reveal the trade-off

Question	Fixed	Indexed
Energy-price predictability	Higher for stated term	Lower
Benefit from falling market	Usually delayed	Potentially faster
Exposure to spikes	Usually reduced	Usually greater
Need for interval data	Helpful	Important
Formula complexity	Often lower	Often higher

A household with a tight monthly budget may value predictability even if an indexed estimate is slightly lower. A flexible household with an EV, automation or battery may accept variability. The decision is personal risk management, not a universal ranking.

6. Solar changes the profile, not the comparison rules

Solar often removes daytime grid purchases and leaves more evening imports. That can weaken the value of a tariff whose cheapest period overlaps strong solar generation. Model the residual import profile after direct self-consumption, then value exports separately.

A battery can shift solar into the evening or charge from cheap grid intervals, but apply round-trip losses, usable capacity and cycling limits. Read the solar tariff guide before selecting on export rate alone.

7. Run three scenarios

For an indexed offer, calculate a central estimate, a lower-price scenario and a higher-price scenario using the supplier’s stated formula. For a fixed offer, model the stated term and the known renewal or end-of-discount position. Apply the same consumption profile, contracted power, taxes and services.

• Same twelve-month kWh and hourly or period profile.
• Same contracted power assumptions.
• Every supplier fee and required service included.
• Solar export valued under the actual contract method.
• Cancellation and renewal consequences recorded.

Official sources

• CNMC — electricity supply and contract structures
• BOE — Royal Decree 88/2026, general electricity-supply regulation
• CNMC energy-offer comparator

Reviewed 28 August 2026. Contract formulas and eligibility change; confirm current pre-contract documentation.