Why is it much more difficult to compare business energy rates than domestic energy prices?
When it comes to business and domestic energy, things work differently. For a start, there are far more electricity plans out there for businesses than there are for home consumers. When you’re on the hunt for energy plans, it is important to ask yourself the following questions; Which plan is right for you? And, how much will it cost?
The answers are obviously dependant on the type, size and location of your business. In order to find that perfect energy tariff – which costs you the least amount possible yet provides you everything you need – you are required to search several separate suppliers online to be able to fully compare all potential quotes.
Each business electricity supplier in the UK has their own set of rates and tariffs on their variable rate deemed contracts. Each supplier has its own set unit prices (price per kWh) and the standing charge. Of course, these rates aren’t necessarily exactly what you’ll be paying for each one. You can certainly end up paying much less by entering into a formal contract (fixed term or variable) with any business energy provider.
How Can Businesses Find Cheaper Energy Rates?
Without a pre-arranged pricing agreement in place with an energy provider, a business will be expected to pay the flat rates which are essentially the worst possible rates offered by each suppler.
There are ways businesses can save money on their bills; simply using electricity at night, rather than during peak daylight hours can help reduce costs. Being a large energy customer helps – most suppliers purchase their business energy in bulk so are able to offer extended discounts on such large-scale purchases of energy in both their gas and electricity tariffs.
If your business energy contract is coming to a close, it is always advisable to check offers from other electricity suppliers, rather than simply continuing on with your current provider.
Some suppliers will offer businesses with half-hourly meter night time rates that can be as low as 10.60 per kWh, however, there is potential to save even more than this by signing up to a fixed-term contract.
Fixed-term contracts can typically offer savings of 40-60% below the listed rates, with some providers still offering electricity at prices below 10p per kWh.
Everything You Need To Know About Commercial Electricity Pricing
Committing to a fixed term contract isn’t the only way your company can help shave money of those yearly costs. There are plenty of factors that will affect your rates, the single biggest being the wholesale price of electricity.
But how else can a company make an impact on their energy usage and help save themselves money in the meantime?
- Energy Usage
The more energy you use the more you will simply have to pay. By reducing your usage as much as possible, you will be helping to drive down the amount that suppliers will have to charge you for your usage. Every business is different, and each uses varying amounts of energy in order to operate, but there are common practices that everyone can undertake – domestic and commercial energy users alike – which will make a big difference.
Businesses that use less than 100,000 kWh of electricity per year may be considered a micro-business and be rewarded with lower tariffs. So, if your company uses slightly more than the 100,00-kWh cut-off, practising effective energy saving tricks as simple as switching off lights and operating more efficiently can help move your company into a much more affordable bracket.
- Electricity Supply Type/Meter Type
The type of meter and type of energy profile that your business has installed will affect how much you pay. Businesses that fall into profiles 03 or 04 will tend to see cheaper charges on their energy tariffs whilst profiles 05-08 will be landed with higher costs.
- Half-Hourly Metered (HH) & P272 Plans
Any business that falls under profiles 05-08 will use advanced half-hourly metering under mandatory P272 laws. This type of metering may change the tariff you end up paying and should be something you ask about when getting your quotes.
- Company Credit Rating
Your company’s credit rating can come under scrutiny by a supplier when they are considering you for a contract. It goes without saying that the better your business is doing financially, the better your prices will be.
- Renewable Energy
Companies who use green, renewable energy are rewarded from a number of different providers who offer electricity plans which are entirely from renewable sources. At the moment, these plans may cost more than some other plans from other providers, but businesses can see great results from using more environmentally friendly energy, especially in the form of tax deductions.
Business electricity rates differ depending on where in the UK your company is based. This is due to a number of factors including location of power plants, demand and/or the availability of energy infrastructure. The more it costs a provider to buy the energy, the more they will charge the consumer.
Every business owner should compare business electricity rates across as many providers as they can in order to ascertain which tariff is the best suited for them. The importance of comparing across a high number of different providers is paramount, as savings can be comprehensive when dealing with large amounts of energy.