Fixed & Variable Energy Explained | Energy Comparison (2024)

FAQs

What is the difference between fixed and variable power? ›

A variable rate means your energy price can vary during the plan. Fixed rate tariffs offer you security, and are often some of the cheapest deals. Though you will usually be tied in for at least a year and will need to pay fees if you want to exit the fixed deal.

In short, with a variable-rate plan, consumers have a bit more control over their energy rate, but less control over their monthly electricity bill – and that works for many people. Fixed-rate customers pay an agreed upon energy rate over a longer period and enjoy a more predictable bill.

The biggest difference between variable-rate vs. fixed-rate plans is certainty. Fixed rates mean monthly bills you can plan for more easily. So, if you want a predictable budget, a fixed-rate plan is likely a better option for you.

However, the cost of electricity is a variable cost since electricity usage increases with the number of products that are produced or manufactured. In short, if the total cost associated with the cost object changes when the production amount changes, it's likely a variable cost.

Fixed costs are expenses that remain the same no matter how much a company produces, such as rent, property tax, insurance, and depreciation. Variable costs are any expenses that change based on how much a company produces and sells, such as labor, utility expenses, commissions, and raw materials.

Fixing your mortgage for a set period means that you can ensure a large degree of financial stability. But going with a variable rate or tracker mortgage can mean your monthly outgoings may drop when interest rates come down.

With fixed-rate mortgages, you have one set-in-stone interest rate for the entire term of your mortgage. With variable-rate mortgages, your rate will go up or down based on the prime market rate, set by your bank or lender. For both types of mortgages, your regular payments remain the same.

Fixed and variable rate home loans

Variable rate home loans tend to be more flexible, with more features (e.g. redraw facility, ability to make extra payments); fixed rate home loans typically do not. Fixed rate home loans have predictable repayment amounts over the fixed term, variable rate home loans do not.

An APR is a yearly interest rate used to measure the cost of borrowing credit and any changes to your rate could affect your repayment plans. A fixed APR will not be adjusted due to changes in prime rates while a variable rate can fluctuate based on current prime rates.

Though prices can fluctuate depending on supply/demand fundamentals, natural gas prices are often at their lowest during the fall and spring seasons. These are known as the “shoulder” seasons, when weather is mild and demand is low.

What is the difference between fixed and variable electricity rates in Texas? ›

A fixed-rate plan might save you money if your electricity usage is high during peak demand periods. For most Texans, fixed-rate electricity plans make the most sense. If your usage is lower and you can handle some fluctuation in your bill, a variable-rate plan might be more cost-effective.

With utilities like electricity and water, you have a monthly bill that you have to pay a certain rate for. Natural gas, however, is a little bit different. With your natural gas provider, you can choose whether or not you want to have a fixed or a variable rate for your usage. A fixed rate is pretty self-explanatory.

° Fixed expenses: Expenses, like bills, that must be paid each month and generally cost the same amount. Some fixed expenses, like a utility bill, may also be variable because the amount changes each month depending on usage. ° Variable expenses: Expenses that change in amount from month to month.

Utilities– the cost of electricity, gas, phones, trash and sewer services, etc. Some utilities, such as electricity, may increase when production goes up. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

Fixed costs include, for example, rent, monthly leasing costs, insurance premiums and electricity and heating costs. Variable costs, on the other hand, depend entirely on manufacturing and merchandise or provision of services.

A fixed power supply is designed to provide a “fixed” (non-adjustable) voltage. A variable power supply is designed to proved an adjustable range of voltages. The fixed is less expensive. The adjustable is more typically used in a lab or shop.

With a fixed-rate mortgage, payments you make each month will stay the same for the full duration of the mortgage term. With a variable-rate mortgage, while the amount you pay stays the same through the term, the amount that goes toward interest can fluctuate.

There are two major types of capacitors: fixed and variable. Fixed capacitors have set capacitances because the parallel sheets of metal are at a fixed distance apart, while variable capacitors have the ability to change based on manipulation of the parallel plates.

Unlike a fixed annuity, which pays a fixed rate of return, the value of a variable annuity contract is based on the performance of the investment subaccounts that you select. These subaccounts fluctuate in value with market conditions and the principal may be worth more or less than the original cost when surrendered.