Fixed-term electricity contract — what it means and when it pays off

A fixed-term electricity contract (Finnish: määräaikainen sähkösopimus) binds you to a specific provider for a set period — most commonly 12, 24 or 36 months. During this period you cannot freely switch without paying a penalty. In exchange, you typically get a locked price and intro perks. This guide explains the terms, penalties and when fixed-term contracts make sense.

What is a fixed-term contract?

”Fixed-term” refers to the contract’s duration commitment, not its pricing model. You agree to be a customer of one provider for N months. You can still choose between price models: fixed-term + spot, fixed-term + fixed-price, etc.

Pros and cons

• Pro: Better prices — providers reward longer commitment with lower rates.
• Pro: Intro perks — fee-free months, signup bonuses.
• Pro: One decision for years — no need to re-shop annually.
• Con: Cannot switch freely — early termination triggers penalties.
• Con: Locked into one provider — if their service deteriorates, you’re stuck.
• Con: Missing better deals — if prices drop during your contract, you can’t take advantage.

Termination penalties

Typical penalty: €50–200 base fee, plus a fee covering the provider’s lost margin (often calculated as €0.5–2 per remaining month). Some providers also charge for ”lost intro perk benefit” if you terminate within the first year.

Exceptions: Most contracts let you terminate without penalty if a) you move and the new address is in a different distribution area, b) the provider materially changes the contract terms, or c) you die or fall into permanent inability to pay.

When does fixed-term make sense?

Fixed-term contracts work best when: a) you’ve found a good price and want to lock it for years, b) you don’t want to monitor the market actively, c) intro perks (fee-free months) tilt the math in your favour, d) you have a stable living situation (no expected moves).

Frequently asked questions