Should You Opt For Fixed Energy Prices For Your Business Until 2027?

Summary for Busy Readers – A Quick Overview

Ultimately, there is no way to predict prices with 100% certainty. Nobody can say for sure whether energy costs will be higher or lower in 2027. However, current market signals suggest some short-term volatility and rising non-commodity and policy-related costs. Even if wholesale prices fall, these factors could keep bills relatively high.

For many businesses, jumping straight into a 1–2 year fixed contract might feel like the obvious solution, but it isn’t always the right call. The smartest move is to start researching your options as soon as you enter your renewal window. That gives you the breathing space to weigh up different contract types, track how the market is shifting, and decide whether fixing or staying flexible aligns better with your costs and risk tolerance. Longer-term fixes through 2027 can still work if the pricing and timing line up with your strategy, but the key is understanding the full picture before locking anything in.

Practical approach: When reviewing a fixed-rate offer, the simplest and most reliable check is how that price compares with other fixed options available in the market at that time. Fixed rates can stay steady for periods or move quickly, so understanding where prices currently sit will help you judge how well an offer supports your budgeting and planning.

By looking at your recent usage and comparing it with up-to-date fixed-rate quotes, you can see whether a proposed rate aligns with wider market levels. This gives you clear, current context without needing to predict how prices might move in the future.

By having us review the market and cross-check quotes against your recent bills, you gain a clear view of what is genuinely competitive and may uncover a cheaper option you would not find on your own.

What the market is signalling right now (late-2025)

• Wholesale prices: Analysts expect only modest movement in wholesale costs and the domestic Price Cap into early 2026. The wholesale market directly influences the commodity portion of your energy bill, which is why it can cause unit rates to shift. Forecasts point to small decreases followed by gradual rises, offering useful context but not certainty.
• Non-commodity costs: This is where businesses are likely to feel the biggest change. Suppliers are warning that network charges, levies, and regulatory costs are rising and will continue to put upward pressure on overall bills, even if wholesale prices fall. These non-commodity costs sit outside the wholesale market and have a long-term structural impact on budgets for 2026–2027. The standing charge, which covers infrastructure and maintenance, is part of this and contributes to higher baseline costs.

Should I Lock My Energy Prices in Now?

Energy costs are not just about the commodity itself. Your bills are also shaped by:

• Network charges
• Regulatory levies
• Other non-commodity costs (these costs can vary)

Even if wholesale prices fall, these charges could keep your bills high. That means locking in a fixed rate today can protect your cashflow and budgeting. Choosing the right tariff, such as a fixed tariff, gives your business more control over energy costs, even if the market appears volatile.

Key takeaway: Short-term price swings may be modest, but the baseline for your bills is rising. That makes fixing rates now a practical hedge rather than a gamble.

Quick Facts to Keep in Mind

1. Business energy ≠ household energy: Business contracts aren’t set up like domestic ones, and suppliers generally don’t offer true “dual fuel” deals in the way households get them. Electricity and gas are contracted separately, and there are multiple electricity contract structures available. By looking at when and how your business uses power, you can choose a tariff type that fits your usage pattern. Options can include day-only rates, evening rates, weekend rates, evening-and-weekend blends, or flat rates. Matching your contract type to your peak usage periods can make a noticeable difference to your overall costs.
2. Non-commodity costs rising: Network charges, levies, and RAB costs are expected to increase, keeping bills structurally high. RAB (Regulated Asset Base) charges help fund large infrastructure projects, such as new power generation and upgrades to the energy system. These costs apply to all types of fuel, including both gas and electricity, and they can push bills up even when wholesale prices fall.

So, Should You Fix Until 2027?

It depends on what your business actually needs, not what sounds comforting. A multi-year fix can be a solid risk-management move because it locks in your unit rate, stabilises your costs, and lets you budget without flinching every time the market twitches.

But long-term fixes only make sense if certain conditions are met:

• The price is genuinely competitive. Not “looks fine today,” but realistically better than what you would expect to pay if you stayed exposed to the market.
• Your business is stable. Moving sites, downsizing, or changing operations can turn a long fix into a headache. Most business energy contracts don’t include traditional exit fees, and where they do appear they’re usually limited. However, it’s still worth checking the terms so you’re clear on any potential charges if your plans change.

If these factors align with your business priorities, a three-year (or longer) fix could be one way to manage energy cost risk. It’s worth reviewing contract terms, including any potential exit fees and your energy usage patterns, so you can weigh options based on what matters most to your operations rather than committing for several years without a clear sense of risk.

Finding the Right Balance: How to Decide

Instead of thinking purely in terms of fixed versus variable, consider your business’s risk profile and operational needs. There is a wide range of variable tariffs and fixed options available, each offering different levels of price certainty and flexibility to suit your business energy contract needs:

• Risk tolerance: When renewing a business energy contract, consider whether a fixed or variable tariff best matches your risk profile. Businesses that can’t tolerate bill volatility should lean toward a fixed 12–24 month contract; highly price-sensitive or speculative businesses may manage with short-term or variable arrangements, but only if they can absorb spikes.
• Energy intensity: High-use operations, like manufacturing or server rooms, may see larger absolute swings in costs if prices rise or fall, while lower-use sites, such as offices or small retail units, may experience smaller total changes. The way these fluctuations affect a business depends on its own appetite for risk and how energy costs fit into overall spending, rather than a one-size-fits-all rule.
• Cashflow considerations: If price spikes could disrupt operations or borrowing, certainty is more valuable than potential savings.
• Contract flexibility: Exit fees, pass-through charges, and termination clauses can dramatically affect the real cost of a deal. Always evaluate these before committing.

Key takeaway: For businesses with a moderate approach to risk, a mid-term contract, such as around 24 months, could provide a balance between price certainty and flexibility. Variable contracts may still play a role, but the choice depends on how your business prioritises risk management and budgeting.

Risk Matters More Than You Think

Your risk appetite drives the optimal strategy:

• Can your cashflow handle a sudden spike in energy costs?
• Do you prefer certainty over gambling on future prices?
• Are you willing to accept potential exit fees if your plans change?

If your answer is “no” to spikes or uncertainty, fixed contracts (especially 12–24 months) make sense. They safeguard budgets and protect cashflow. If you can tolerate volatility, short-term or variable contracts may offer upside, but they shouldn’t form the core of your strategy.

Key takeaway: Most businesses and customers benefit from making fixed contracts the foundation of their energy strategy. Layered exposure and variable contracts can complement this, but certainty and risk protection should lead your decision-making.

Final Recommendation

Ultimately, energy costs affect every business differently, depending on how much energy you use, when you use it, and the type of contract in place. For example:

• High-energy operations (like factories or large workshops) can see bigger swings in absolute costs, even if the proportion of change is the same as smaller sites.
• Smaller or low-usage businesses (like offices or boutique shops) may experience smaller total changes, so energy costs make up a smaller slice of overall spending.

Many business contracts include a mix of fixed and market-linked costs. This means some of your spend is predictable, while the rest moves with the market. Understanding your usage patterns (when energy is needed most, across sites or operations) helps identify where your exposure to price changes is greatest.

Other elements, like standing charges, unit rates, regulatory costs, and any limited exit fees, also affect total costs. Looking at the full picture gives a realistic sense of how bills could change over time.

Why Utility Bidder Should Handle This For You

At Utility Bidder, we compare the whole market, negotiate with suppliers for sharper rates and make sure every contract is judged on its real cost, not just the headline figure. You get clear options, proper analysis and a strategy that actually fits how your business works.

We dig into the details and stop you paying for a certainty that you don’t need. If a fixed deal is the right move, you will know it. If it isn’t, you will know that too.