Business Electricity Guide

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Business Electricity Guide

Business Electricity
  • How business electricity pricing works 

  • Average business energy prices

  • How to get accurate business energy quotes

  • How to find the most competitive energy tariffs

  • The difference between domestic and business energy

  • Business energy contract types

How business electricity pricing works

Electricity prices and plans for businesses are determined and set up in a different way than those for homes. The first thing to note is that you do not have to use the same supplier for both your business electricity and gas supply – although you may be able to if you do. Because of the quantity of energy used, business electricity unit prices may be lower than domestic prices, but most corporate clients pay a higher rate of VAT. Business electricity rates are dependent on the size of your company and its electricity usage. It will be calculated on a unit rate per kWh and will be measured on a variable or fixed rate tariff. Iff you have a half-hourly meter, a price based on your usage will be given.

Average business energy prices

According to reports, the estimated yearly business energy bill for a small or large business will be more than £3,000 for electricity and close to £1,000 for gas, but the exact cost of energy depends on how your businesses work. Every business is unique, and the quantity of energy consumed reflects this. You can look at previous bills to see how much your company is already paying for energy and use our comparison tool to find potential savings.

How to get accurate business energy quotes

When your deal ends, your supplier will most likely contact you about a new contract. This contact may be made via letter or email and will frequently include a recertification quote that is higher than the market’s average business energy prices, which is why it is critical to compare commercial energy deals. You can get the most accurate estimates if you use real energy consumption information as your reference and provide meter numbers.

How to find the most competitive energy tariffs

The electricity market has traditionally been volatile and risky. This makes it challenging to predict how electricity and gas prices will change in the future. The rates that business energy suppliers quote reflect market dynamics, and many factors can influence this, including consumer demands, significant international events, and even the weather. When your contract’s switching window opens, the best way to ensure you have access to competitive business energy deals is to compare quotes so you can find the best value for money.

The difference between domestic and business energy

Another distinction is the manner in which contracts are terminated. Industrial energy contract terms bind corporate clients, whereas residential customers can switch openly despite their contract as long as they are willing to pay an exit fee. Contract switching and cancellation periods differ as well. For business customers, you cannot switch until you have entered the switching window, also known as the renewal window, which typically opens six months before the end of a contract period. There is no cooling-off period for corporate customers after switching, as there is for residential customers.

Business energy contract types

  • Fixed-rate tariffs

When you select a fixed-rate tariff, the cost you pay for electricity remains constant. Your company’s bills will continue to be higher if it uses more energy, but the quantity it pays for each unit of electricity will be fixed.

  • Variable-rate tariffs

A variable-rate tariff offers more flexibility by not charging a fixed rate per unit of energy. Instead, your fees will represent what is going on in the energy market as a whole.

This can be advantageous when energy costs are low, but it is risky because your bills will start rising when energy costs rise. Because the price of energy is determined by market activity, the amount your company pays for energy can vary from month to month. One significant advantage of variable-rate tariffs is that there is no contract term, so your company does not need to commit to long-term contracts. You should be able to cancel your contract with one month’s notice.

  • Green business energy tariffs

There are numerous reasons to go green with your business energy, ranging from financial incentives to social responsibility, and, most importantly, customer expectations and retention. A green energy tariff uses renewable sources of electricity if your company wants to lower its carbon footprint and operate in a sustainable manner. Using our comparison tool, you can find green business energy deals. Choose between renewable contracts with the Big Six or a growing number of green suppliers that only offer renewable energy.

  • Multi-site energy contracts

If your company has multiple locations, you can manage them all at once by selecting a multi-site business energy deal. Quotes for this type of contract are combined into a single purchasing offer that takes into consideration data from meters across all of your sites.

  • Half-hourly meters

Businesses that use a significant amount of electricity use half-hourly meters that send readings to energy providers every 30 mins. If your company has a half-hourly meter, you will only be charged for the energy you use. Meter reading data also assists you in managing your power usage by revealing peak hours and days, allowing you to make changes to improve energy efficiency.

  • 28-day contracts

Tariffs of this nature are now uncommon and date back to before economic liberalization. If your company has not changed suppliers in more than thirty years, it will be on a 28-day contract.

  • Out-of-contract tariffs

When your contract expires, it’s critical to find a new job. If you do not, you may  be transferred to a rollover agreement and charged out-of-contract rates for your commercial energy. This usually means that your company ultimately pays far more than it ought to. When your existing deal is about to lapse, compare and switch business energy deals instead of letting it roll over to an expensive tariff.

  • Deemed rate tariff

If you relocate your business, you may be subject to a deemed rate. In the absence of a formal contract, these are usually the default option, but they are typically extremely costly. If your company is paying deemed rates, you should try comparing quotes and transfer to a better deal to avoid overpaying for energy.

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