Electricity contract means a contract for the supply of electricity to a selected point of use and the price of the electricity supplied. The electricity contract defines who has ordered the electricity, where the electricity is to be used, how much the electricity will cost and the duration of the contract.
Electricity transmission and electricity tax are billed separately by the local grid company and are not affected by the electricity contract. The electricity contract is therefore only an agreement on the supply of electricity and the price to be charged for electricity.
Choosing and ordering an electricity contract
When choosing an electricity contract, the first thing you usually look at is the price of electricity. However, the final electricity price is calculated using a different formula depending on the type of contract, which may seem confusing to the uninitiated.
In practice, when choosing an electricity contract, you should consider the following:
- Electricity price
- Pricing method
- Share of the basic contribution
- Date expired
The easiest way to find a new and cheapest electricity contract for your own use is to use our comparison engine. To the comparison engine just need to report estimated annual electricity consumption, then the machine automatically calculates the estimated annual costs & arranges electricity contracts from cheapest to most expensive - regardless of the contract pricing method.
The comparison table also allows you to order a new electricity contract with just a few clicks.
Pricing methods for electricity contracts
Electricity pricing varies according to the type of contract, and the best type of contract for personal use varies according to the type of housing you live in. Certain electricity contracts also carry risks associated with price variations, which you should be aware of before you sign up. In this section, we look at the most common types of electricity contract and their pros and cons.
Fixed price electricity contract
A fixed-price electricity contract is an easy and worry-free choice and the simplest form of pricing. The contract pays a fixed monthly price, as the name suggests, and within this price you can use a certain amount of electricity per month. Any excess is charged according to the electricity company's tariff.
Fixed contracts are in our comparison but almost invariably the most expensive options. This is mainly a marketing ploy by the electricity companies - to package the same electricity in a more expensive package, making it look like a hassle-free and easy choice.
In a fixed contract, you will also pay an extra charge if your electricity consumption exceeds the usage cap of the package.
Universal electricity is the next simplest contract right after the fixed contract. Under universal electricity, you pay a price (c/kWh) based on consumption and - depending on the contract - a monthly basic charge. For all contracts there is no basic charge, so the price is based on the consumption of electricity 100%.
Universal electricity is often the cheapest for apartment buildings
Monthly free universal electricity contract without a basic fee is usually the most affordable option for apartment dwellers. In many cases, the electricity consumption in a block of flats is so low that most of the electricity bill is made up of the basic charge instead of the electricity component.
Therefore, when purchasing an electricity contract for a low consumption household, the first thing to look at is the monthly price of the contract, rather than the price of electricity.
The annual price for universal electricity is calculated as follows:
[electricity consumption] * [kWh price of electricity] + (12*[fixed monthly fee])
Example: 2000 kWh per year for an apartment block. Electricity price 5,09 c/kwh, basic fee 2 €/month.
Annual price: 2000 kWh * 0.059 €/kWh + (12 months * 2 €) = 142 €
You can automatically calculate estimated prices for different electricity contracts our comparison engine
Night-time electricity is a type of electricity contract where the price of electricity varies according to the time of day. Electricity is cheaper at night and more expensive during the day. The price difference is based on the difference in the price of electricity bought by the electricity companies on the exchange, depending on the time of day, which means that electricity at different prices can also be offered to customers.
In practice, night-time electricity is not a sensible choice for many apartment dwellers - except for those who use more electricity at night than during the day.
In practice, however, night-time electricity mainly brings savings to the owner of an electrically heated detached house, where night-time electricity can be utilised by optimising the electricity consumption of the electric heating system for the night.
Seasonal pricing. There are usually two different prices for seasonal electricity: the summer price and the winter price. Winter electricity is more expensive, due to increased electricity consumption in winter.
Market priced electricity
Market priced electricity is a type of contract where the price of electricity is determined by the Spot price on the Nord Pool power exchange (c/kwh). In the case of exchange electricity, the electricity is paid for according to consumption at a spot price, a margin from the electricity company and, depending on the contract, a fixed monthly fee.
Because of the fixed monthly fee, electricity from the exchange is often not the optimal choice for a small apartment. The advantage of exchange electricity is that electricity is always available at the current market price.
Exchange electricity usually cheapest in the long term
The price paid for electricity in exchange-traded electricity has been shown to be cheaper over time than any other type of electricity contract. In a stock exchange contract electricity price can vary a lot depending on the year, the season and the time of day, which can even make the choice to buy electricity from the exchange seem like a scary one.
In a high-consumption household, electricity bills can vary quite a lot between months with exchange electricity, which is why a user of this type of contract should have sufficient reserves so that fluctuations are not immediately felt in their own household.
While exchange-traded electricity may seem an uncertain and unpredictable choice, it has so far been the cheapest type of contract in the long term.
The price of electricity should not usually be compared between months, but should be looked at over a period of 1-2 years. In this period, prices tend to level off, so that temporary fluctuations in electricity prices do not confuse the averages.
Predictability of electricity on exchanges difficult
Calculating the price of electricity on an annual basis for exchange electricity is more difficult than for general electricity, because the price of electricity is calculated according to the spot price, which varies from moment to moment. Therefore, to calculate an accurate price, it would be necessary to know the spot price for each hour of the year and the electricity consumption for each hour of the year.
Our comparison table the calculator calculates the estimated annual cost based on the average price of the previous year, so variable consumption and spot price are not taken into account. As a result, the actual price may differ somewhat from the estimate, for example if more electricity is used at different times of the year or day.
Validity of the electricity contract
In addition to pricing, there are differences in the duration of electricity contracts. In practice, the duration is divided into two different types: fixed-term and open-ended contracts.
A fixed-term electricity contract is valid for a fixed period, usually from six months to two years. Other lengths are sometimes shown in comparisons - such as 3 months or 36 months.
However, a fixed-term electricity contract cannot bind the customer for longer than 24 months.The 36-month contract can therefore be terminated by the customer after 24 months, but the electricity company cannot terminate the contract before the 36-month limit.
A fixed-term contract of a maximum of 24 months can only be terminated by the customer in connection with a move.
Check the pricing of a fixed-term contract before ordering
Fixed-term contract the price is often the same throughout the contract period, and electricity companies often offer fixed-term contracts at a lower price than open-ended contracts.
However, in some fixed-term electricity contracts, the price may change during the contract period. Many electricity companies market fixed-term electricity contracts where the low promotional price is only valid for the first month or months. These electricity contracts are often misleading for customers - the price may seem really cheap, but can become much more expensive in the middle of the contract period.
This is not illegal on the part of the electricity companies, because the price change is mentioned in the contract terms. It is therefore worth looking carefully at the terms of the contract before ordering a fixed-term contract.
Agreement for the time being
Electricity contract for an indefinite period is valid for an indefinite period, as its name implies, and may be terminated at any time by giving 14 days' notice. An open-ended contract therefore allows you to compete for electricity contracts and change contracts almost as often as you like.
The disadvantage of this type of contract is that the price is often more expensive than for fixed-term contracts.
How to order a new electricity contract?
It takes just a few minutes to order a new electricity contract via our website. We will forward the contract details you order via the order form to the electricity company whose contract you have chosen. The whole process takes just minutes.
However, when it comes to ordering an electricity contract, whether you are moving to a new home and the status of your current electricity contract will make a difference.
When you are changing electricity company
If you are changing electricity company but not moving, check the type of your old contract before ordering a new one. If your current contract is a fixed-term contract, you cannot change electricity company in the middle of the contract period. In this situation, you will therefore have to wait until the fixed-term contract is about to expire before you can change your electricity company.
If your current contract is for an indefinite period, you can change your contract and order a new one with 14 days' notice. The new contract can therefore start at the earliest 15 days after you order it.
Depending on the electricity contract and the electricity company, you may have to terminate the old contract yourself, or you may be able to get the new company to terminate the old contract. This will be verified on our order form when you place your order.
When you are moving
When you move, you can choose to start a new electricity contract in a few days, so you don't necessarily have to wait for the normal notice period. However, it is advisable to sign a new electricity contract well in advance of the move, as a last-minute switchover can mean extra charges. We are also unable through our website to ensure that the electricity contract takes effect on the same or the next day.
It is usually possible to get a new electricity contract in your new home immediately, but in some cases it can take a few days to connect to the grid. It is also possible to have the connection done on a fast-track basis if the electricity is urgent, but many providers charge extra for this service.
If you move to a new home, you can terminate your fixed-term contract at no extra cost. In fact, moving house is the only situation where it is possible to terminate a fixed-term electricity contract without any charge.
Where to get an electricity contract now?
If you have moved or are about to move into a new home and need to get your electricity contract in place immediately, we have found that the easiest way to do this is with Fortum. With Fortum, you can quickly sign a contract online, and in the best case, the electricity will be connected to your home within a couple of hours of ordering.
Read more: Electricity contract immediately
When you subscribe to an electricity contract, you get to choose how the energy is produced. Electricity is produced in many different ways in Finland, and there are differences between them, for example in terms of emissions.
In our comparison, you can filter contracts by type of electricity generation. For many contracts, it is also possible to select a specific production method at an additional cost. For example, if you want, you can select only wind power for your contract.
In Finland, energy is still produced using forms of production that are not optimal in terms of emissions. By choosing an electricity contract that uses environmentally friendly energy, you are playing your part in shaping the way electricity is produced in Finland in the future.
The most suitable electricity contract for different types of housing
The same electricity contract is not always the most suitable for all sites. For example, the best electricity contract for a low-electricity apartment is usually not the same type as for an electrically heated detached house.
In a detached house, the decisive factor is how the house is heated. For an electrically heated detached house where night-time electricity is possible, the most suitable electricity contract is often exchange electricity. Exchange electricity is usually the cheapest contract in the long term. However, the price of electricity can fluctuate a lot with exchange contracts, so you should be prepared for fluctuations in the size of your electricity bill.
In a block of flats, grid electricity may not be the best choice, as in most cases electricity consumption cannot be optimised - except by reversing your own sleep rhythm. In addition, exchange-traded electricity contracts usually come with a fixed monthly fee of a few euros, which means that it is not usually the cheapest option for a flat in a block of flats where electricity consumption is low.
In most apartment buildings, the cheapest option is to get a monthly free electricity contract, where the electricity company's bill is only the price of the energy used. The price per kWh of electricity under such contracts is usually slightly higher than, for example, the price of exchange electricity, but due to the low consumption, the small increase in the price of electricity does not affect the overall picture.
What is not included in the electricity contract?
In addition to the electricity billed under the electricity contract, the user is also charged electricity tax and the electricity transmission price - usually on a different bill from the electricity price. This is because the electricity tax and the electricity transmission are billed by the local grid company.
Electricity tax and electricity transmission cannot be put out to tender and the electricity contract does not affect their price. The electricity tax is the same for everyone, and electricity transmission prices are determined by the place where you live.
Because transmission and electricity tax are not linked to an electricity contract, you may receive two separate electricity bills - unless your transmission company and your electricity company are the same company. However, this does not have to be the case, as you can buy electricity from any Finnish electricity company.
Frequently asked questions
What is the most suitable electricity contract for a student?
Students are sometimes offered cheaper than normal supply contracts by electricity companies. Often these "student electricity contracts" are not actually cheaper than other contracts. So compare electricity contracts (including exchange electricity) before ordering electricity, even if some electricity companies advertise cheaper electricity for students.
Why am I getting two electricity bills?
There are two different things to consider when buying electricity: the price of electricity and the price of electricity transmission. When buying an electricity contract, you can compare the prices of the companies selling energy and choose any Finnish electricity company. However, the electricity is always transmitted by a local transmission company, and the electricity transmission is also priced separately. You cannot therefore change the company responsible for the electricity transmission - it is always automatically determined by the place where you live. It is therefore not possible to influence the price you pay for electricity transmission.
Some transmission companies also sell electricity, so if you contract with one of these companies, you will not receive separate bills from different companies if you sign an electricity contract with the transmission company in your area.
Can I get an electricity contract without credit history?
It is possible to get an electricity contract without credit history. In Finland, electricity is defined as a fundamental right and companies cannot refuse to sell it on the grounds of default. However, an electricity company may charge an additional deposit to a credit-impaired person. It is therefore a good idea to find out well in advance before you move house or sign a contract.
Comparing electricity contracts can bring surprising savings
Electricity should be put out to tender whenever possible. In many cases, electricity is sold by both stand sellers and telephone sellers, which prevents the buyer from comparing prices between electricity companies. This usually means that the price of electricity is not as cheap as it could be. Comparing electricity contracts online makes it easier to buy electricity, and you can compare the prices of different electricity companies' contracts before you order - without the electricity seller breathing down your neck.
How can I terminate my electricity contract?
A fixed-term electricity contract can only be terminated if you move house. Most electricity companies will give you two weeks' notice to terminate an open-ended contract.
Which electricity company can I order a contract from?
It is possible to conclude an electricity contract with any company selling electricity in Finland. There are dozens of electricity companies in Finland, so it is worth comparing contracts carefully. An electricity contract with the biggest and best-known company may not be the best or cheapest option. In many cases, the price of electricity is cheaper with smaller companies.
How is the price of electricity determined?
The price per kWh of electricity is determined differently for different electricity contracts. You can choose which pricing model you want when ordering an electricity contract. The lower part of this article explains how electricity is priced in different contracts. The price per kWh of electricity varies depending on the type of contract and the electricity company.
When you sign up for a new electricity contract, you can choose which electricity company you want to buy your electricity from. That's why it's so important to compete for electricity - you can quickly find the best electricity contract by making a comparison on one website.