Choosing between the regulated tariff (PVPC) and a free-market price

Key rules

• PVPC exit: A PVPC contract has no minimum term and no penalty for leaving, so you can switch at any time without charge.
• Who it covers: The PVPC is for supplies up to 15 kW with a reference supplier.
• Price risk: PVPC and indexed prices move with the market, while a fixed price keeps your bill predictable.
• Penalties: Some free-market offers charge a penalty if you leave early, so read the permanence clause before you sign.

The short answer

PVPC follows wholesale electricity prices and is flexible. Free-market offers can be fixed or indexed. Choose by three things: how much price risk you can live with, when you use power, and what budget you need to hold.

How the PVPC works

The PVPC is the regulated tariff for small consumers, up to 15 kW, with a reference supplier. Its energy price changes every hour. It mixes day-ahead market prices with forward market prices. The forward share rises each year: 55% in 2026, with the rest at the hourly day-ahead price. Regulated access charges and other fixed charges are added on top. The grid operator publishes the hourly prices every day.

The big plus is flexibility. A PVPC contract has no minimum term and no penalty for leaving, so you can switch at any time without charge.

What free-market contracts offer

• Fixed price: the price per kWh stays the same for the contract period, usually a year. Your bill is easy to predict.
• Indexed price: you pay the wholesale price plus a margin or fee. Your cost moves with the market.
• Time-banded price: different fixed prices by time of day, for example cheaper at night, or a plan with free hours.

Some free-market offers have a permanence clause with a penalty if you leave early. Many add extra services, such as maintenance cover, that you pay for.

How to choose

• Risk: if a high bill in a bad month would hurt, a fixed price is safer. PVPC and indexed prices can rise and fall.
• Usage: if you can run the washing machine, oven and car charger in cheap hours, PVPC rewards you. If your use is flat through the day, a fixed price often suits better.
• Flexibility: if you may move or want to switch, PVPC or an offer with no penalty keeps you free.
• Budget: if you need the same bill each month, pick fixed. If you can absorb swings in return for lower average cost, consider PVPC or indexed.

Compare with your own numbers

Take your real consumption from a recent bill or your supplier's online area. Enter it in the national energy regulator's free comparison tool, and compare the yearly cost of each offer. Check the permanence clause and any extra services before you sign. The warnings and FAQ below cover the main traps.

What to watch out for

• Fixed offers may tie you in: Some fixed-price free-market offers have a permanence clause with a penalty if you leave early. You could pay to leave if prices fall or you move. Ask before signing whether there is a permanence period and what the penalty is. If you want freedom to switch, the PVPC has no minimum term.

• Indexed prices and PVPC can jump: PVPC and indexed contracts follow the wholesale market, so your bill can rise sharply in expensive months. Indexed contracts also add a margin or fee on top. If you cannot absorb a bigger bill, choose a fixed price for a predictable cost. If you choose PVPC or indexed, keep a buffer in your budget.

• A fixed price can cost more for you: If you can shift use to cheap hours, a fixed price may cost you more than PVPC. If your use is flat, PVPC's cheap hours bring you little. Enter your real consumption in the CNMC comparator before you choose, rather than judging by the headline price.

• Extra services raise the real price: Many free-market offers include extra services, such as maintenance plans, that raise what you pay beyond the energy price. Check the offer for bundled services and decline the ones you do not need.

Frequently asked questions

How is the PVPC energy price worked out?

The PVPC energy price mixes the hourly day-ahead market price with forward market prices, and the forward share grows each year. It is 25% forward in 2024, 40% in 2025 and 55% in 2026, with the rest at the hourly price. Regulated access charges are added on top, and Red Eléctrica publishes the hourly prices every day.

Who can get the PVPC regulated tariff?

You can get the PVPC if your contracted power is up to 15 kW and you sign with a reference supplier (one of the companies that must offer it). Free-market offers do not have this limit. Ask the supplier whether it offers the regulated tariff.

What is a time-banded free-market contract?

A time-banded contract has different fixed prices for different hours of the day. For example, it may be cheaper in valley hours (the low-demand hours), or give you a free-hours plan. It suits you if you can move heavy use, such as the washing machine, to the cheap hours.

How do I compare offers using my own consumption?

Use the CNMC comparator, the energy regulator's free comparison tool, and enter your real consumption from a recent bill. This shows which offer is cheaper for your own pattern of use. Also look at any extra services bundled into an offer, since they add to the price.