Are Market Tracker Energy Contracts Right for Your Business?

The Hidden Risks of Market Tracker Energy Contracts: What Businesses Need to Know

When 'Flexible' Contracts Lock You In

Not all energy contracts are created equal — and some that seem flexible can lead to unexpected price hikes.

We recently spoke to a business owner who’d signed a four-year energy deal through a broker, only to see their prices increase in year two. This wasn’t due to bad timing or usage — but because they were on a market tracker contract.

These deals only fix your first-year rates. After that? Prices are reviewed annually and can rise even if the wholesale market doesn’t.



Here’s what’s really going on, and why businesses should tread carefully.

What Is a Market Tracker Energy Contract?

A market tracker deal typically works like this:

• Contract length: Fixed for 3–5 years.
• Year 1: Prices are fixed.
• Years 2 onward: Rates are reviewed annually based on wholesale market trends and non-commodity charges (NCCs).
• Once reviewed, rates are locked in again — until the next review.

On the surface, it sounds like a balanced approach: you benefit if prices drop, and you avoid being stuck with poor timing. But the devil is in the detail…

Why Tracker Contracts Can Lead to Rising Costs

Let’s break it down.

Even if the wholesale market stays the same or drops slightly, your prices can still rise due to non-commodity costs. These include:

• Network charges
• Capacity Market costs
• Balancing charges
• Transmission and distribution costs

🧠 Key point: NCCs have increased every single year in recent memory. We can’t recall the last time they actually went down.

So even if wholesale energy costs fall, you might still face higher bills — especially if your supplier adds margin on top of those changes.

Who Is a Market Tracker Right For?

Tracker contracts can suit larger businesses with energy managers, or those willing to actively monitor the market and engage in annual reviews. They may:

• Understand how wholesale and NCC changes work.
• Be happy to accept some price volatility.
• Have the bandwidth to negotiate each year or challenge uplift logic.

But for most SMEs and busy business owners, this complexity can be a real risk:



• You’re exposed to uncapped cost increases.
• It’s hard to budget with rates changing annually.
• You may not even realise your rates have changed until the bill lands.

👉 Think you might be on a tracker contract?

We’ll review your agreement and show you if you’re overpaying or exposed to future price hikes.

Can You Exit a Tracker Contract?

These contracts are typically term-fixed, meaning you’re locked in for the full 3–4 years.

However, there may be grounds to challenge or exit a deal if:

• The product was poorly explained at sign-up.
• You were led to believe it was a fixed-rate deal for the full term.
• You were not shown what could happen when NCCs increase.



Always check the T&Cs and speak to a professional before assuming you’re stuck. We’ve helped clients review contracts and challenge broker-sold deals when terms weren’t made clear.

Fixed vs Tracker – A Clarity Comparison

💡 Even if tracker deals “track the market,” they don’t always pass on full savings — but they will pass on increases.

🔒 Avoid price shocks and unpredictable reviews.

Get a fully fixed quote and take control of your energy costs today.

Final Thoughts: What You Should Ask Before Signing

Before agreeing to any energy contract:

• Ask what is fixed and for how long.
• Check if NCCs are passed through or included in the rate.
• Understand if and when your price will be reviewed or adjusted.



If you're unsure, we can help you review your contract before you commit — or even if you've already signed and have concerns.