What is a variable rate plan?

When choosing an energy plan, you need to consider multiple factors, such as living situation, location, property size and how much energy you use. If you are in the process of choosing a provider, you are in the right place! In this article we are going to go through what a variable rate plan is, why you would/would not pick a variable rate plan, and who can benefit from it the most. Please note that you should always look at a price comparison website to find the best deal.

So, what is a variable rate plan?

Unlike a fixed-rate plan, which is rigid in terms of pricing and offering to the end-user, a variable rate is a flexible plan that is a lot cheaper and goes up and down on a monthly basis depending on what the market is performing like for that current provider. Variable rate plans come with no commitment time, meaning you can switch plans whenever you please and you will not incur an exit fee. Unlike fixed-rate plans, variable rates offer a lot more fluidity for the end user. The downside to this is that if the pricing goes up, you are not protected and would have to pay on the increase.

So, why would I pick a variable rate plan? And why would I not pick a variable rate plan?

Pros Cons
No exit fees, change whenever you want If prices fluctuate and are higher, you will have to pay the increased amount
If the pricing is cheap and goes down, you will save money too Not as much choice from providers on plans
A lot cheaper than fixed-rate plans


Who can benefit from it the most?

In theory, everybody can benefit from a variable rate plan depending on what you are looking to get out of an energy plan, but below we have highlighted three categories that could benefit from a variable plan the most:

  • Workers who travel: If you are in a job that requires more out and about work than being home-based, or if you are someone that spends a lot of time traveling and less time at home, then a variable rate plan allows you flexibility to change your plan depending on a work schedule as well as saving you money in the long run.


  • Smaller properties: Less people, less energy, less hassle! Smaller properties are usually easier to manage when it comes to energy plans, and if you live on your own you may be able to really benefit from a flexible plan, even if there is a fluctuation in price every now and again.


  • Renters: If you are in a property where you do not know how long you want to stay, a variable rate plan would probably be best suited. This means you can exit whenever you want without incurring an extra fee.

Please note that when picking a plan, whether it be fixed or variable, use a price comparison website to make sure that you get the best deal out there!


Author: Claire Stapley
Claire Stapley is ElectricityComparison.com.au's Energy Editor, based in Melbourne Australia. Claire is a founding member of ElectricityComparison.com.au News and Energy Team.