What is the difference between pass-through and fixed charges in a quote?
Fixed (non-pass-through) charges are locked into your unit rate for the whole contract. Pass-through charges, such as network or environmental costs, are billed at actual cost once they are known, so your total bill can rise or fall during the term.
The two parts of every quote
Your price has an energy part (the wholesale cost plus the supplier's margin) and a non-energy part: network charges, government levies and so on. A quote tells you how the second part is treated.
- Fixed: the supplier estimates these costs, builds them into your unit rate, and takes the risk if they rise.
- Pass-through: the supplier bills them at actual cost, and you take the risk. Ofgem notes that some charges, such as environmental levies, can be passed through once the amounts are known.
Our glossary covers pass-through and non-pass-through. The charges involved are described in non-commodity charges explained.
A worked comparison
Imagine a workshop using 40,000 kWh of electricity a year and two made-up quotes.
| Quote | Unit rate | Treatment |
|---|---|---|
| A: fixed | 25.0p all-in | Non-energy costs included |
| B: pass-through | 21.0p plus actual non-energy costs | Billed at cost |
If the non-energy costs come to 4.5p/kWh, B costs 21.0 + 4.5 = 25.5p. Annual cost: 40,000 × £0.255 = £10,200, against 40,000 × £0.25 = £10,000 for A. If they come to 3.5p, B is 24.5p, which is £9,800. Same quote, different bill.
B looks cheaper at a glance because its headline rate is lower. Always ask what is excluded before comparing headline prices.
Which suits you?
- Tight budget, want certainty: fixed is easier to plan around, though you pay for the supplier carrying the risk.
- Can absorb swings: pass-through may work out cheaper if costs fall, but that isn't guaranteed.
These charges can move a lot. One comparison site (Moneysupermarket, 21 October 2026) says network transmission charges rose by over 60% from April 2026; we have not checked that figure against an official source. Exactly which charges a supplier passes through varies, so ask for a list.
Questions to ask before you sign
- Which charges are passed through, and how often are they updated?
- Is there a cap, or advance notice of changes?
- How will they appear on the bill? See reading your bill.
Reading the small print on a quote
Quotes often show two lines: a unit rate in pence per kWh and a daily standing charge. Check whether the unit rate is described as "fully fixed", "all-in" or "excluding pass-through". If the wording is vague, ask for it to be confirmed in writing.
Also check which items sit outside the price. Climate Change Levy, for instance, is a tax added on top (0.801p/kWh from 1 April 2026) and VAT is added at 20% unless you qualify for a lower rate. See VAT and Climate Change Levy.
A simple rule of thumb
Compare quotes on the total expected annual cost, not the headline rate. Take your annual kWh, multiply by each unit rate (adding your best estimate of passed-through costs), then add 365 days of standing charge. Whichever total is lower under a realistic and a pessimistic assumption is the safer pick for your budget.
Next steps
Ask every supplier for a like-for-like quote, fixed against pass-through. See fixed vs flexible contracts.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.