The variable electricity plans are available only in states that have deregulated the energy sector. In other words, you can now choose your electricity providers when it comes to purchasing electricity. You can select your service provider who will supply electricity at a competitive rate as a retailer. With the variable plan, you are bound to a monthly bill based on the fluctuating market electricity rates. The bill generated will also reflect your monthly power consumption. Compared to the fixed, the variable electricity plan depends on several factors such as the rising price of natural gas, fuel cost, and the price of electricity. But the question remains under what circumstances variable plans are ideally suited for homes or businesses.

Variable Plans for Home

Many households prefer the fixed electricity plans over variable-rate plans because it buffers them from the fluctuating market price of electricity. If your electricity consumption is similar throughout the year, then the fixed electricity plan is suitable. With the variable plan, chances are there that with a sudden rise in the price of natural gas, the cost of manufacturing electricity can increase. As a result, the burden will fall on your electricity bill. Similarly, even if your supplier vouches that the electricity is sourced primarily from green energy sources, then chances are there that you might have to pay more for green energy. This will get reflected in a variable plan. Hence, most households should have a fixed electricity plan to know how much they will have to play at the end of the month. You can opt for a variable plan if you are unsure how long you will stay at a particular place and shift to a new home.

Variable Plans for Businesses

Most businesses opt for variable plans as it is difficult to predict the amount of energy used by a business enterprise. For instance, at the weekend the offices remain closed and hence, it does not seem feasible to pay for the two days when most of the electrical equipment in your office is not in use. The HVAC system in your office might stay shut down when there are no staff members in the office. In such a situation with a fixed plan will not prove to be helpful. You will be paying for electricity when you are not using it. In such a scenario, a variable electricity plan can prove to be helpful. In most cases, businesses prefer to purchase variable plans rather than a fixed plan, proving to be more cost-effective.

When you choose an electricity plan, be it fixed or variable, it is essential to keep the pros and cons of both plans in mind. In most cases, households prefer the fixed plans as the power consumption is fixed, and businesses prefer the variable plans as power consumptions fluctuate even in a week. If you want to know which is the best plan for your home or your business, you could also speak to your service provider to know more.