Fixed or variable electricity price? The third option the power companies don't talk about

The question of a fixed or variable electricity price comes up every time the news reports a price spike or a price crash. The advice shifts with the weather. When prices climb on a cold February night, a fixed contract is suddenly recommended. When they fall on a windy spring day, the message is instead that variable is cheapest over time. For you as a homeowner, it becomes hard to know what actually holds true.

What we rarely talk about is that the whole question may be framed wrong. Choosing between a fixed or variable electricity price means choosing which risk you want to take — not how you actually lower your electricity cost. There's a third way to look at it, and it's probably not the one your current comparison sites show you.

To understand why the third option is so rarely discussed, we first need to look at what the two classic choices really offer — and the limitations they share.

A fixed electricity contract locks the price per kilowatt-hour for a set period, usually one to three years. You know what each kWh costs, but you often pay a premium for that security. A variable electricity contract follows the market spot price hour by hour. It can be very cheap for long stretches and suddenly very expensive during the odd week.

Both contract types share the same underlying problem. They are only about the price of the electricity — not about how much electricity you use or when you use it. And that is where the actual cost for your household is decided.

For a typical house, electricity accounts for a significant share of the total cost of living there, especially over the winter half of the year. But whether you have a fixed or variable contract, three things remain that the contract itself does nothing to change:

A good contract can lower the price per kWh by a few öre. But if the house draws 20,000 kWh a year, it is the house's consumption that is the big cost. Not exactly which öre you pay per hour.

The grid fee goes to your local grid owner and is separate from the electricity contract. And as capacity tariffs are introduced more and more often, you also pay more if you use a lot of electricity at once over short periods — something neither a fixed nor a variable contract handles.

With both a fixed and a variable contract, you are fundamentally a recipient. You receive a price and you pay it. It is not a model that lets you reduce your exposure to the electricity market — only choose how you want to be exposed.

The third option is about changing the playing field itself. Instead of focusing on which contract you sign, you focus on how much electricity you need to buy and when you need to buy it. That is where solar panels, a battery and an efficient heat pump come in — as one coherent system, not as three separate products.

With your own production, you reduce the electricity you need to buy from the grid. With a battery, you can store the day's surplus and use it when the price is high. With smart control, the heat pump can work more when electricity is cheap and less during expensive hours. Together, this means you no longer have to guess the electricity price right — you have already reduced your exposure to it.

Elvy is not an electricity company. We do not sell electricity, and you do not sign an electricity contract with us. What you get is an energy subscription in which solar panels, a battery and a heat pump are installed as an integrated system with no startup fee. Instead, you pay a fixed monthly cost over the term of the agreement.

The monthly cost includes the equipment, the installation, a full operating guarantee and ongoing optimisation of the system. The smart control makes the decisions for you — when the battery should charge, when the heat pump should run, when the surplus should be sold. You keep your electricity contract, but it plays a smaller role in your finances because you buy less electricity from the grid.

The difference is not that you get a better electricity price. The difference is that you need less of the electricity the electricity company sells you.

The model suits you if you want a predictable monthly cost without tying up capital or taking technical responsibility for the installation. It doesn't suit everyone.

If you already have solar panels, a battery and a modern heat pump that work well, a new solution may not give you more than it costs. If you want to own the equipment yourself, optimise actively against the electricity market and take on the full risk, a traditional purchase may fit better. And if your total electricity consumption is low, the saving is smaller, simply because there is less cost to cut.

For many homeowners in Sweden with an ageing heat pump, high electricity bills in winter and a wish for calmer household finances, it is, by contrast, an option that deserves to be compared — not with a variable or fixed electricity contract, but with what it actually costs to do nothing.

The question of a fixed or variable electricity price will always be there, and for many households it is still worth thinking about. But it is not the biggest lever you have. How much electricity you buy, when you buy it, and how efficiently you use what you produce yourself — that is where the real difference is made.

Want to know what an energy subscription would cost for your specific house, based on your current consumption and heating? Fill in your details and we'll get back to you with a concrete proposal and free advice.