Fixed or indexed electricity tariff in Spain: which suits you
TL;DR
- Indexed (including PVPC): you pay the wholesale market price hour by hour. Volatile — can work out very well or very badly depending on the month and market context.
- Fixed: a single per-kWh price for the duration of your contract. Predictable.
- Quick decision: if an unexpectedly high bill in a bad month would stress you out, go fixed. If you can tolerate volatility and shift consumption to off-peak hours, indexed or PVPC.
The differences in one table
| Fixed | Indexed (free market) | PVPC (regulated) | |
|---|---|---|---|
| €/kWh price | Locked in the contract for the term | Wholesale + retailer margin | Wholesale + regulated charges |
| Volatility | Zero | High (changes every hour) | High |
| Retailer margin | Large (they absorb wholesale risk) | Medium | Doesn't apply (it's the regulated tariff) |
| Risk of a bad-month bill | Zero | High (especially January with heating) | High |
| Typical commitment | Usually has one (12 months is standard) | Varies, often no commitment | No commitment |
How each one is built
A fixed tariff bakes in a safety margin for the retailer. If they lock you a closed price for 12 months and the wholesale market goes above it, the retailer loses. If it goes below, they win. To avoid losing, they set the price above the expected wholesale price for those 12 months. That mark-up is the cost you pay for predictability.
A free-market indexed tariff tracks the wholesale market hour by hour with a commercial margin added on top. The retailer takes no price risk — they earn a fixed margin per kWh.
PVPC is the regulated version of indexed: it tracks the wholesale market hour by hour with the regulated grid and system charges on top, with no additional retailer margin. Only the Comercializadoras de Referencia (the reference retailers — there are eight authorised in Spain) can offer it.
When does each one win?
- Fixed wins in crisis years, or when the wholesale market is rising steadily (your earlier locked price ends up below the current market).
- Indexed/PVPC wins in years with high renewable generation and low wholesale prices.
There is no permanent winner — it depends on the year and on whether you signed your fixed tariff at the start or the end of a high-price period.
The "fixed with revision" trap
Some retailers sell "fixed" tariffs that, in the small print, carry revision clauses:
- Automatic annual revision.
- Revision triggered by regulatory change (often only when it favours the retailer).
- An indexed tariff dressed up as fixed.
How to spot it: read the contract clauses carefully. If they mention "revision", "update" or "modification" of the price during the contract term, it isn't 100% fixed.
Recommendation by profile
| Profile | What usually fits |
|---|---|
| Household on a tight budget, sensitive to a bad month | Fixed |
| All-electric home with heating + kids | Fixed |
| Couple working from home, energy-efficient flat, flexible consumption | PVPC or indexed with a low margin |
| Pensioner with the bono social discount | PVPC (the social discount only applies to PVPC) |
| Electric car charging overnight | A tariff with a cheap off-peak band (PVPC or fixed with a night band) |
| Household with solar panels | Fixed, or indexed with a good surplus-export rate |
| Small business with fixed opening hours and a predictable budget | Fixed |
Frequently asked questions
Is a free-market indexed tariff the same as PVPC? Conceptually yes (both track the wholesale market). The difference: PVPC adds only the regulated components; a free-market indexed tariff also adds a commercial margin on top.
If I sign a fixed contract, can I switch to indexed later? If you have an active permanence clause, not without a penalty. Without permanence, at any time.
What happens when my fixed-tariff permanence expires and nobody warns me? You'll roll over to the "renewed" version automatically, which is often more expensive than the original promotional price. Check your bill and re-compare every 12 months.
How do I decide in my specific case? Upload your bill and we'll compare what you'd pay on each tariff type with your real consumption.