The answer we give you is clear: the choice between a regulated market and a free market depends on your personal needs and preferences. Here are the main details 👇🏼

Your choice will depend on how much you value price stability, flexibility, vendor options and potential savings.

📉 Regulated Market

1. Prices set by regulators: supply prices are set and regulated by the Ministry of Industry, Energy and Tourism and by the electricity market. These prices are based on production costs, distribution and other factors, and are set to ensure that consumers have access to essential services at reasonable prices.
2. Fewer vendor options: consumers have fewer options in terms of providers, they all offer the same thing and are authorized by the government to provide those services.
3. Apparent price stability: prices may seem more stable and predictable, but the reality is that they change every day.
4. Focus on universal access and consumer protection: are designed to ensure that everyone has access to essential services, and there are often strict regulations to protect consumers and prevent abuse. And only in this type of market can you ask for the aid of the Tariff of Last Resort (TUR) and the social bonus.
   

📈 Free market

1. Prices set by companies. They are fixed and guaranteed for the duration of your contract. Providers compete with each other to attract consumers.
2. More vendor options: consumers can choose between different companies and services according to their needs and preferences.
3. Possible savings: competition between suppliers can lead to more competitive prices and special offers. Consumers can find options that save them money.
4. Online energy market: most companies have been digitized, allowing consumers to compare and contract services on digital platforms.

In short, the fundamental difference is found in the way in which prices are set and the number of options available to consumers.

🖇️ How are they different?

 Regulated Market: in the regulated market, prices and conditions are established and controlled by governmental or regulatory entities. The main objective of this type of market is to ensure equitable and affordable access to basic services such as electricity and gas for all citizens.

1. Electricity: rates are set by a regulatory entity, based on factors such as production costs, distribution and other factors. Consumers have less flexibility in choosing their provider and must accept established rates.
2. Gas: similar to electricity, tariffs are regulated by the relevant authorities. Prices are set based on production costs, distribution and other factors.

Free Market: In the free market, prices and conditions are determined by supply and demand, and consumers have more options to choose between different suppliers and rates. Here's a description of how it works in each case:

1. Electricity: consumers can choose between several providers and rate plans. This promotes competition between companies and results in a greater variety of options and more competitive prices for consumers.
2. Gas: As with electricity, in the free gas market, consumers can choose between different providers and rate plans. This can encourage innovation and competition among suppliers.

We see that, in the regulated market, rates and conditions are set by government entities to ensure access to and affordability of essential services. In the free market, prices are determined by supply and demand, allowing consumers to choose between different providers and rates. But we forget to talk about a basic supply, don't we?

💧 What about water?

In Spain, water is an essential public service and generally is managed in a regulated manner. It is not considered a free market in the sense that it would apply to other basic supplies subject to competition between several private suppliers.

Here are a few reasons why, in Spain and many other places, water is included in a regulated market:

1. Essential nature: Access to safe drinking water is essential for people's lives and health, and is considered a fundamental human right. Therefore, governments often step in to ensure that water is available to everyone at reasonable prices.
2. Natural monopoly: water supply management at the municipal or regional level is often a natural monopoly. This means that, due to expensive infrastructure and the lack of economic viability for multiple providers, generally only one entity can efficiently provide water services in a certain area.
3. Quality regulation: The regulation of the water supply ensures that the quality and safety standards necessary for human consumption are met. This includes monitoring drinking water quality and proper wastewater management.
4. Consumer Protection: in Spain, there are regulations to protect consumers from unfair practices and to ensure that prices are reasonable. These regulations are often the responsibility of local or regional authorities.
5. Public Responsibility: given the critical role of water in society, local, regional or national governments in Spain assume responsibility and management of the supply, even in situations of scarcity or emergencies.

They can exist in privateprivate companies that provide services related to water, such as the installation of purification systems or wastewater management. But this supply is considered a public service. Essential in Spain and is regulated accordingly. This is done to ensure universal access, quality and affordability of water for all citizens.

🤔 What should I choose?

Here are some considerations that could help you make an informed decision:

As for the regulated market:

• It allows you to welcome the social bonus.
• You can adapt your consumption to off-peak periods (when the price of electricity is cheaper) to save on your bill.
• It has no permanence.
• You can't choose renewable energy.
• It is compatible with the hourly discrimination rate (rate in which the price of electricity varies depending on the time at which the consumption is made).
• Only the PVPC rate is available (Voluntary Price for Small Consumers), with a contracted power equal to or less than 10 kW, limiting consumer options.
• Los Prices vary every hour depending on supply and demand of energy, and they make it difficult to plan consumption.
• AND they do not offer additional services such as maintenance or energy advice.
• In the Free market:
• Marketers offer a variety of rates and services, allowing you to choose the option that works best for you, but also the variety It makes it difficult to choose of the best option.
• They exist discounts and promotions that attract new customers or build loyalty with existing ones.
• You can choose 100% clean energy.‍
• They offer additional services, such as maintenance or energy advice.
• Consumers have the suppleness to change the retailer or rate at any time if they find a more convenient offer.
• The rates can not be completely transparent, since marketers can change their conditions and increase the final price.
• Some rates may have permanence clauses, which limits consumers' flexibility to change retailers or rates.

👩🏻 ‍ 💻 Your Polaroo manager helps you

If you are undecided, since Polaroo we can help you and decide for you. The choice depends on your individual needs, preferences and circumstances, and we can do a personalized analysis so that you have the best contracted rate and your costs are optimized to the maximum. Ask us!

If you want to know more about us and the advantages of hiring our service, you can consult the webpage.