Private in-browser planning
Energy Contract Break-Even Calculator
Starting values are hypothetical. Replace them with your own figures. Inputs stay in this browser and are not included in the energy inquiry.
- Use one commodity and one consistent unit. The illustrative inputs are electricity kWh.
- Level annual usage is prorated across months; seasonal cases need a monthly worksheet.
Use one commodity and a documented exit cost
Choose electricity kWh or natural gas therms and keep that unit for both rates. Do not mix kWh and therms in a generic units field. The annual quantity should represent the expected consumption pattern during the period being evaluated. If the remainder is strongly seasonal, a straight annual prorating is only an approximation and a month-by-month model is preferable.
Obtain the actual exit or switching cost from the agreement or an appropriate written statement. It may not be a simple flat fee, and a contract can contain notice, damages, timing or minimum-volume terms. This calculator cannot interpret those clauses. Enter other recurring supplier fees separately so they are included on the correct side of the comparison.
The recurring and term calculations
Annual recurring difference equals annual units multiplied by current rate minus proposed rate, plus current annual fees minus proposed annual fees. Multiply that difference by selected months divided by twelve to estimate the gross term difference. Subtract the one-time switching cost for the net term difference. Positive net difference favors the proposed option only within the modeled inputs.
For a hypothetical 120,000 kWh account moving from $0.10 to $0.09 per kWh with unchanged recurring fees, the annual difference is $1,200. A $500 one-time cost takes five months of level monthly savings to recover. Over twelve months, the modeled net difference is $700; over three months it is negative $200.
Read break-even results carefully
Simple break-even time divides the one-time cost by the positive monthly recurring difference. If there is no positive recurring difference, the model reports that there is no break-even under these assumptions. When the one-time cost is zero, recovery time is zero, but the net difference can still show that the proposed arrangement costs more.
The break-even proposed rate solves for the rate at which the selected term’s gross difference exactly equals the one-time cost. It includes the entered recurring-fee differences. A negative threshold can occur when fees are too large to recover even at a zero proposed unit rate. That is a diagnostic arithmetic result, not a quote or a practical instruction to seek a negative retail rate.
Check the assumptions before changing service
This model does not discount cash flows or account for taxes, future index prices, deposits, credit, service overlap or changed usage. It assumes the entered rates and annualized fee difference apply consistently through the selected months. A fixed current contract and a proposed floating rate require explicit price scenarios, not one assumed future price labeled certain.
Keep the contract, supplier cost statement, usage forecast and selected dates with the result. Confirm notice and replacement arrangements before making a service change. A favorable modeled comparison does not itself authorize cancellation. Use the contract tracker to organize verified dates and the commodity offer tools to compare cost scope before evaluating one-time switching costs.
Sources & scope
Primary references reviewed October 15, 2026. These sources support the stated concepts; actual tariffs, program rules and signed agreements govern the account. Decision examples and operational worksheets are original educational analysis.
- DOE FEMP: Evaluating Your Utility Rate Options
Energy charges, demand charges, fixed charges and tariff structures; practical limits of simplified rate calculations.