There is usually a little more to your business energy bills than a regular domestic bill. And with so many tasks competing for priority in any business, a lot of business energy policies tend to get put at the bottom of the list. But taking a few minutes to look over your energy bills could unveil some interesting facts.
The three main aspects of your business energy bill are your standing charge, your unit rate(s) and your contract end date. But there are plenty more aspects to your bill that you should know about.
Understanding your bills is key to knowing whether what you are paying is too high, too low, or exactly the right amount.
Breakdown of Business Energy Bills
The standing charge on your bill reflects the rate you pay each day for having energy supplied to your business. This doesn’t necessarily reflect the amount of energy you use, however.
Business electricity tariffs always have a standing charge whilst gas tariffs don’t. Where the standard charge is low or non-existent, the costs will be recovered by the supplier elsewhere.
This tells you how much you pay for each kilowatt hour (kWh) of electricity or gas. It is a common misconception, but the lowest possible unit rate does not necessarily mean you will be getting the cheapest possible energy price. It all depends on how much you use. A low unit rate is vital for businesses that use a large amount of energy, but for lighter users, a higher unit rate may be preferable.
Contract End Date
Business energy contracts cannot be cancelled until they reach their final 6-month period. So, knowing when your business energy tariff runs until is vital for businesses, so they can check their policy and make sure they can’t get it cheaper anywhere else.
Climate Change Levy (CCL)
For every unit of non-renewable energy your business uses, you have to pay a government levy. This makes it preferable for companies to use renewable energy, so they won’t have to pay any CCL. If your business has a domestic or residential element to it, for example a B&B, care home or campsite, you won’t have to pay any CCL at all.
Most companies pay 20% VAT on their business energy bills, but you will only need to pay 5% if you use less than the average 33 kWh of electricity or 145 kWh of gas per day.
Understanding your bills will help you determine, when you compare business energy prices, whether your current tariff is the best for you and your company.