In our previous article, we considered whether an exchange electricity contract is worthwhile, even though there are price spikes during the fall and winter months. Now, based on feedback from its earlier report, YLE has conducted a new investigation comparing exchange electricity to fixed-price, fixed-term contracts.
In September, YLE compared which electricity contract model would be cheaper over the course of a year — exchange-linked or fixed-price. Many consumers felt the comparison was too simplified and didn’t take into account the differences in consumption between the winter heating season and summer months. Therefore, YLE conducted a new comparison that considers monthly variations and houses of different sizes. It’s worth noting that although the comparison included three different-sized detached houses, it can also be extended to, for example, electrically heated row houses.
Spoiler - the result is the same, exchange electricity is cheaper
In YLE’s article, houses consuming 5,368 kWh, 11,571 kWh, and 21,832 kWh were compared. In practice, the consumption/price curves were similar in each scenario. Throughout the entire year, there was only one month (December) when the fixed-price electricity contract was cheaper than exchange electricity. You can read more about YLE’s article through this link.
The study aligns with data from Vihreä Älyenergia (VÄE), which shows that exchange electricity is the most affordable electricity contract model. By combining an exchange electricity contract with VÄE’s Smart Energy app, which makes it easy to track cheaper and more expensive hours through price alerts sent to a smartphone, even more savings can be achieved compared to a fixed-price contract. There is often a cost benefit to exchange electricity contracts, as households using exchange electricity tend to be more energy-conscious and avoid leaving devices and appliances on unnecessarily. Therefore, financial savings come not only from timing electricity use but also from reducing overall consumption.
What about hybrid and flexible contracts?
YLE’s article notes that exchange electricity was also the winner in a more detailed comparison conducted by an Energy Authority professional from October 2023 to September 2024. According to the study, a hybrid contract would have been almost as cheap, though still slightly more expensive than an exchange electricity contract. However, hybrid contracts are not always comparable to one another, as there are several different hybrid models and calculation methods depending on the provider. Vihreä Älyenergia does not sell hybrid or flexible contracts because they are difficult for consumers to understand, and for some, a flexible contract could even end up being more expensive than a fixed-price, fixed-term contract.
Locking in the price for "expensive months"
As the winter months approach, many are considering the option of locking in electricity prices for the heating season. Vihreä Älyenergia is also planning to introduce this option for its exchange electricity customers (though the timeline is still open). In practice, price locking works with different providers either as a 50% or 100% lock. The clearest option is a 100% lock, which essentially means that the customer enters into a fixed-price contract for, say, December, after which the contract reverts to a market-priced agreement. According to YLE’s research, locking in the price doesn’t necessarily offer a cost advantage during the winter months, as there was only one month in the comparison when the fixed-price contract was cheaper than exchange electricity.
In practice, locking in the price for a shorter period acts as a kind of insurance against unexpected, prolonged, and unpredictable periods of high electricity prices, which have historically been very rare and exceptional. Nevertheless, it is still possible. However, YLE’s research comparison coincided with a time when exchange electricity experienced significant price spikes, and exchange electricity was still a more affordable option than a fixed-price, fixed-term contract.
Vihreä Älyenergia's tips for making an electricity contract
Exchange electricity is the most affordable and ecological option, especially if the electricity is produced using fossil-free methods, like all the electricity sold by Vihreä Älyenergia. Therefore, we recommend an exchange electricity contract to maximize benefits using our free Smart Energy app, Älyenergia. You can download it here for free.
A fixed-price, fixed-term contract is generally chosen for peace of mind or cost predictability. In light of comparisons and studies, this is practically more of a psychological choice than a cost-conscious one. Since a fixed-term fixed-price contract operates on the same logic as insurance (against high prices), it ultimately ends up costing more, especially when the risks do not materialize
Which option is your choice? It completely depends on you. However, we recommend trying an exchange electricity contract and the Smart Energy app between March and October, when the psychological barrier is lower for many. Long-term users of exchange electricity have found that an exchange electricity contract is often more affordable for them than a fixed-price, fixed-term contract, even during the winter months of the heating season.
