So many options are available for electricity providers for a household. However, there's much more to the decision than whether the plan is the cheapest, such as the quality of the service and potential incentives. Finding which is right for you can prove overwhelming. 

Becoming familiar with the energy plans and how they work plus understanding the factors to consider when comparing providers can make the decision-making process easier. Please visit bestestrøm.no for an overview of the best electricity plans. 

As we go, we'll offer tips on how to find a quality albeit cheap electricity plan for your household. 

Different Types of Energy Plans 

Finding your home's highest-quality cost-efficient electricity plan can be challenging. Many don't know exactly where or how to start the process. You'll get the best deal when you learn the plan processes and the provisions to compare with each company. 

The considerations will include the monthly price point, the rate type, and contract length. The fixed and variable rate types are the units of measure that determine the amount paid per kWh. The rate will be higher with fixed accounts, but these give homeowners a predictable budget. 

Variable accounts can start at a low rate but fluctuate based on market conditions. You'll need to factor in monthly fees along with any added charges tacked onto some energy plans, like hidden fees or delivery costs.  

Contract length is a factor, with some companies requiring a long term of at least three years, while some will offer a month-to-month option.  

This allows homeowners a chance to transition from one plan to the next to find the most suitable and budget-friendly option with more flexibility. Here are the different electricity plans, how they work, and their benefits. 

The fixed-rate energy plan 

The price paid per kWh- kilowatt hour for a fixed-rate energy plan stays the same during the contract term regardless of the market prices. This allows a predictable budget with your monthly energy costs. Still, the electric bill won't always be the same despite the fixed rate. 

It will be based on the amount of energy you use, along with the utility company's additional fees. You must check the state's averages to get a general idea of the fixed energy rate you'll be responsible for. 

Before choosing between a fixed or variable rate, weigh the advantages and downsides of each. The fixed plan comes with several benefits that will allow a manageable budget. These include the following: 

• Predictability and consistency with monthly charges 
• Prices will remain the same regardless if the market prices increase above your costs 
• A manageable budget around the utility costs is feasible 

There are also a few disadvantages to consider with the fixed energy plan including the following: 

• The price will stay the same even if the market rate drops below the cost you're paying. 
• If you decide to cancel before your contract ends you could face early cancellation fees. 

The variable rate energy plan 

The price paid for each kWh of energy with a variable rate plan is determined by the market or other factors the retail supplier considers. Since the electricity market prices change frequently, your costs can also increase. This will benefit you if the prices fall.  

However, when the demand rises or the temperatures increase, energy prices go up, making the variable rate expensive. A variable plan can also be complex. Some can start with a low rate and remain stable for a couple of months but then suddenly spike to a higher amount. 

This is why it's essential to thoroughly read the terms and conditions before choosing a plan. Some benefits associated with this energy plan include the following: 

• Flexibility to switch providers depending on the contract length without fear of having a cancellation fee. 
• When market prices drop, your costs will go down considerably as well. 

There are also downsides to selecting the variable energy plan that needs to be considered. 

• You could enjoy a few months of low fixed rates only to suddenly see a spike in the market, resulting in an expensive rise in your monthly energy rates. 
• When fuel costs or natural gas prices rise, variable rates per kWh will go up. 
• Managing a budget will be difficult with fluctuating prices. There will be no consistency or predictability with your prices. 

Which plan is better for you will differ from which will work for a neighbor, loved one, or close friend. Many factors play into the decision, especially how many occupants live in the home, how much energy you use, the location of your home, and the way your finances are structured. 

Some people prefer a predictable budget, making the fixed plan suitable for its consistency. Others prefer the possibility of the bill dropping when the market falls and the flexibility of changing providers. Some of the choices depend on your risk tolerance.  

Choosing a variable rate involves a degree of risk. Go here for details on how to get the cheapest electricity in Norway.  

Another consideration is whether you want to deal with a shorter-term contract or prefer a long-term term to avoid constantly thinking about renewal. Let's look at this aspect of energy plans to help with your decision-making. 

Short-Term vs Long-Term Electricity Contracts 

Many factors need to be considered when entering into an energy contract besides the rates and fees, like the contract duration and terms and conditions. Each aspect affects electricity prices. It can get confusing to know how contracts work and whether a longer or shorter duration is more cost-effective. 

We'll look at each so you can weigh the advantages and downsides as they pertain to your situation. 

Short-term including month-to-month contracts 

Short-term energy supply contracts are typically less than a year in duration. The standard lengths include month-to-month, three-month- and six-month. The rates for a short-term contract can either remain the same or fluctuate according to the market based on the plan you select.  

A month-to-month contract is a variable rate since these fluctuate with each month's charges. This means you'll shop for new rates more frequently, which can be good or a disadvantage depending on the season. Here are a few advantages: 

• More flexibility to shop for lower rates and change providers more frequently. These require less commitment than longer durations, which is good if you move often. 
• There's a greater chance to sign up with a low rate, particularly with month-to-month options. The market trends are easier to track and secure at their lowest. 

There are also a few downsides associated with short-term duration energy contracts. 

• Renewal can come with higher rates when a new month comes along if the market prices suddenly spike. 
• Renewing is a consistent process compared to longer-duration contracts. Customers tend to forget when the renewal date comes around. 

Long-term electricity contracts 

Long-term electricity supply contracts can last up to five years, commonly 12 months, 24 months, and 36 months. These have rates that are fixed regardless of the market's behavior. These contracts are a considerable commitment but are also more stable, consistent, and predictable. Here are some benefits. 

• Each month the rate remains the same throughout the contract's term allowing a manageable budget whether the market spikes or if it drops. You won't need to worry about a renewal date or selecting a new provider. 
• When entering at a low contract rate for an extended duration, you enjoy that rate for the entire time. Those savings won't be rescinded. 
• You can take more time and forethought to compare costs and companies when the contract is closer to ending instead of being rushed each month. 

There are also downsides to the long-term energy contract duration that need to be considered. 

• If you have a low rate, the long-term duration is excellent. But if the market prices fall drastically, you won't be able to take advantage of the drop. You'll be locked in at the fixed rate for the entire contract length, however long you've signed up for. 
• Long contracts are a significant commitment. If you take it out for five years and decide you don't want to keep it that long, most providers will charge an early cancellation fee for breaking the contract. 

Final Thought 

The cheapest electricity plan will depend primarily on where you live, who lives in your home, and your usage. With either the variable rate or fixed rate, you have the chance to get a low rate. The difference is your risk tolerance. The market will determine whether the variable rate rises or falls. 

In that same vein, with a fixed rate you're risking missing out on the market dropping below what you're paying.  

The suggestion is to speak with a reputable, trusted supplier who can walk you through the contract's fine print, weighing the pros and cons to help with decision-making.