What is the best contract term for an energy plan: 1 or 3 years?
Would you like a fixed-rate energy contract with price certainty, but aren’t sure which contract term is best for you? In this article, we’ll help you decide between a 1-year and a 3-year fixed-rate contract.
The Best Choice at a Glance
For most situations, a 1-year fixed-rate energy contract is currently the best choice. Such a contract is structurally cheaper than a 3-year fixed-rate contract, and you’re locked into your rates for a shorter period.
This means you can switch providers sooner if rates drop again later on. This is particularly beneficial if you sign a fixed-term contract now and lock in a high gas price due to the war in the Middle East.
Choose a 1-year fixed contract if:
- You want lower energy costs compared to a 3-year fixed contract
- You want to remain somewhat flexible and be able to switch providers in time
- You expect rates to drop again later
- You will have solar panels starting in 2027
Choose a 3-year fixed-rate plan if:
- You primarily want certainty about your energy costs for a long period
- You’d rather not have to worry about your energy contract too often
Why should you choose a 1-year fixed-rate energy contract?
There are several reasons why a 1-year fixed-rate energy contract is a smarter choice right now than a 3-year fixed-rate contract:
- On an annual basis, this is cheaper than a 3-year contract
- You receive a proportionally higher sign-up bonus
- You can switch providers sooner
- This is a smarter choice if you have solar panels, given the end of net metering starting in 2027
A 1-year fixed-rate energy contract is the most cost-effective choice. The cheapest 1-year fixed-rate contract is €142 cheaper per year in June 2026 than the most affordable 3-year fixed-rate contract, based on standard consumption of 2,500 kWh and 1,000 m³.
Annual contracts also offer the best welcome bonuses relative to consumption. These can amount to as much as €470 with standard energy consumption. If you have high energy consumption, the welcome bonuses can even reach a one-time €600.
Furthermore, a 1-year contract allows you to retain some flexibility. After a year, your energy contract expires, and you can reassess whether a fixed-term energy contract is the right choice for your situation, or whether you might want to consider a dynamic energy contract.
Which provider offers the best 1-year fixed-rate energy contract?
The best 1-year fixed-rate energy contract for you depends entirely on your situation. For example, if you have solar panels, the feed-in tariff and feed-in costs also play a major role.
That’s why you should use our energy comparison tool. It takes into account all rates and costs for 2026 and 2027. This way, you’ll know which provider is the cheapest specifically for your situation.
Based on our research into the best energy provider for 2025/2026, the following providers are the most frequently cited as offering the lowest price for a 1-year fixed-term contract.
Since historical prices are never a guarantee of future prices, we recommend that you always compare based on current rates.
Why should you choose a 3-year fixed-rate energy contract?
You should choose a 3-year fixed-rate energy contract primarily if you want peace of mind and certainty. You lock in your rates for a long time, so you know exactly where you stand regardless of what happens in the energy market.
Here are the main benefits of a 3-year fixed-rate plan:
- Long-term price certainty: your rates stay the same for 3 years. If energy prices rise, you won’t feel the impact.
- No need to worry about your contract: you won’t have to compare rates or switch providers again in the coming years if you find that process a hassle.
- Stable monthly costs: long-term certainty in your budget and monthly bills.
- Peace of mind in uncertain times: during significant fluctuations in the energy market, a longer contract provides extra security.
But be careful: a 3-year fixed-rate plan isn’t always the smartest choice
That certainty also has a downside. In practice, a 3-year contract is less flexible and always more expensive.
On average, a 3-year energy contract is about €305 more expensive per year than a 1-year energy contract.
- You don’t benefit from falling prices: if rates go down, you’ll keep paying your (higher) price. Especially with gas prices being high right now, this is a disadvantage.
- You can’t just cancel: switching early often isn’t possible without a cancellation fee.
- Total costs are higher: In comparison, 1-year contracts are cheaper.
Not a wise choice right now: a 3-year fixed-rate plan with solar panels
Do you have solar panels? If so, you should opt for a 1-year fixed-rate plan because the net metering scheme will end in 2027. We expect many suppliers to improve their net feed-in rates, which will have a major impact on the yield from your solar panels. Therefore, it’s not a good idea to lock into a long-term contract now, as it will make it harder for you to switch providers.
Geert Wirken
Energy expert
Topics
What did you think of this article?
Your feedback goes directly to our team and helps us provide you with better information.
Thank you for improving Keuze.nl!
We'll look into improving this.
We'll work on improving this article.