An increasing number of consumers feel that the prices paid for electricity are very high. It is true that the prices of all products and services have increased, but the rise in the energy sector is particularly striking, especially when compared to previous years.

For this reason, in this article, we will discuss the most important aspects that should be taken into account when making an electricity contract.

So that users can select the best option for their homes and make monthly savings on their bills.

What alternatives are there to the electricity contract?

When one intends to enter into an electricity contract, one must be aware of the two main alternatives for doing so: the free market and the regulated energy market, but what do these markets offer?

What do I need to know about energy markets?

These two major markets have their own characteristics that differentiate them from each other based on thecharacteristics of the contracts, the companies that work in both markets, the contractable power and other factors that we will detail below:c

What characterises the free market?

• Within this market, we will find a large number of companies offering their services, which are free to set the contractual conditions they choose, as well as the prices they charge for electricity.
• This plurality facilitates the coexistence of a large number of tariff options to choose from, with options that are adapted to a wider public.
• Users who include their contracts in the free market will be able to request the power they wish to contract for their home or premises, without limitations.
• Another feature is that companies can offer their customers discounts and promotions, in addition to complementary services such as repairs or maintenance.
• It should also be noted that users of the free market will not be able to apply for the benefits offered by the current social voucher, which provides benefits to the most vulnerable consumers.

What characterises the regulated market?

• In the regulated electricity market, a total of eight energy marketing companies operate, which must establish the conditions set by the State for the contracts, which means that there is only one single tariff available, known as the PVPC tariff or regulated tariff.
  This tariff has the peculiarity of presenting hourly discrimination of energy prices, establishing three time slots that present three different prices on a daily basis, known as the flat, valley and peak slots. So, in order to know the light prices today, we should consult the information provided by the government for this day.
• Those users who decide to opt for the regulated market will see that the maximum contractable power cannot exceed 10 kW in their electricity contracts.
• In order to maintain the homogeneity of the service, the commercialisers will not be able to offer any type of promotion or discount, nor additional services to the contracts.
• On a positive note, those users who opt for the regulated market will be able to apply for the benefits provided by the social voucher for the most vulnerable consumers.

How do I choose the option that best suits my energy needs?

Once the peculiarities of both alternatives are known, we must focus on knowing our own electricity demands, in order to be able to choose with greater precision the option that is most beneficial for the contract.

Since, in order to know the most advantageous option between the free or regulated tariff, we should not only look at the terms of the contract, but also at our own needs, which determine which contract is the most appropriate.

In order to better understand internal demands, we need to analyse:

• What are the actual power demands in terms of the power required, as if this exceeds 10 kW, we will only be able to choose free market alternatives, while if we do not exceed 10 kW, we can also opt for the PVPC tariff.
• Whether one has the capacity to structure electricity consumption, favouring a greater use of energy at times when it is more economical to obtain it, if this is possible, the regulated market could be a fascinating option. On the other hand, if most of the consumption is carried out in peak periods, it will be interesting to evaluate the free energy market in search of better prices.
• The presence on the free market of some promotion or discount from a company that is really interesting.
• If the minimum requirements for the application for the social electricity voucher are met, in which case, it will facilitate monthly bill savings, provided that the contract is within the regulated market.