Compare Business Electricity
Why you should switch business electricity supplier
Energy is likely to be one of your biggest business expenses so cutting back on the cost can help boost overall profits. But switching your business electricity supplier isn’t quite the same as changing domestic provider, and there are some differences you’ll need to be aware of. So, to make sure you find the best business electricity tariff for your needs, here’s what to consider.
Why you should switch business electricity supplier
If you haven’t switched suppliers for a while, you could be paying more than you need for your business electricity; this is because wholesale energy costs go up and down.
The best way to get the cheapest business electricity is through a fixed price business plan that could keep the price of your electricity the same for two or more years. That’s because as wholesale energy costs go up and down, so too do energy rates charged by suppliers.
Switching your business electricity supplier is also a good opportunity to look for better customer service, particularly if your current supplier hasn’t met your expectations. Plus, if you’re worried about the effect of energy use on the environment, switching to a greener electricity supply can help cut your business’ carbon footprint.
How is business electricity different from domestic electricity?
There are some fundamental differences between energy deals for homes and businesses, for example:
- Length of contract — business energy contracts usually last much longer, typically five years compared to 12-months for domestic energy.
- No dual fuel — you won’t be able to buy gas and electricity together which means separate contracts and bills for each.
- No cooling off period — unlike domestic energy deals, there’s no cooling off period so you won’t be able to change your mind once you’ve made the decision to switch.
- No signature needed — business energy contracts don’t need to be signed and can be agreed verbally, which means it’s best to get everything in writing before making a decision.
How do I compare business electricity suppliers?
Business energy deals are tailored to your specific needs based on your electricity consumption. With that in mind, the two most important elements to consider when you compare suppliers are:
- Cost per kilowatt hour (kWh) — you’ll pay for every unit of electricity you use which is measured in kilowatt hours. The more you use, the more you can expect to pay.
- Standing charge — this covers the cost of supplying electricity to your business premises. The amount is charged at a fixed daily rate.
It’s vital to look at these two costs together because while the cost per kWh might be low, the standing charge could be very high — or vice versa.
What business electricity tariffs are available?
The tariff you choose has a direct impact on bills so it’s vital to compare what’s on offer to ensure you’re getting the best deal for your business needs.
When it comes to business electricity, there are four main types of tariff:
Fixed rate tariffs
These tariffs set the unit price of electricity per kWh. Prices are fixed for the length of your contract which means you won’t need to worry if wholesale energy prices increase. On the flip side, it means you won’t benefit if wholesale electricity prices fall.
If your electricity use is consistent every month or quarter, a fixed rate tariff can help you budget, as you’ll know what to roughly expect. Bear in mind your bills can still go up or down depending on the amount of electricity you use, but the price you pay per kWh will stay the same.
Variable rate tariffs
Also known as flexible rate tariffs, this is where the unit price of electricity fluctuates depending on wholesale or market costs.
Variable tariffs are more volatile than fixed rate tariffs. On the one hand, you’ll benefit from lower electricity prices if wholesale costs fall but you could end up paying a lot more if they rise. Ultimately, this can make it a lot harder to forward plan your business’ expenses.
Deemed rate (out-of-contract) tariff
This is essentially your energy supplier’s default tariff and is typically the most expensive.
You can unwittingly find yourself on a deemed rate tariff if an existing contract comes to an end, or if you’ve just moved into new premises and haven’t agreed a contract with anyone.
This is where your existing contract automatically renews if you haven’t already agreed to a new electricity tariff.
If you were on a fixed rate tariff that then rolls over, don’t assume it will still represent good value for money. Chances are, there’ll be better business energy deals out there — you just need to find them.
What is a half hourly electricity meter?
A half hourly meter (HH meter) monitors your electricity use and sends an updated meter reading to your supplier every 30 minutes.
HH meters are usually reserved for businesses that use a lot of electricity (at least 100 kW in any half hour period). For example, if you own a manufacturing plant or need to power busy production lines. If this is the case, your energy supplier is likely to have contacted you already about your energy needs.
You can tell if you have an HH meter by looking at the S number of a recent electricity bill. If the figures 00 appear next to it, then you have an HH meter.
What information do you need to switch business electricity?
When you search for business electricity prices, you’ll be asked various questions which will help new suppliers work out the best plan for you. Most of the questions will be straightforward — such as the postcode of your business and who your current supplier is.
You’ll also be asked about your current electricity consumption either in value or in kWh, which you can find on previous bills.
How does switching business electricity work?
The good news is that switching business energy is easy. Just like domestic energy switches, everything will be managed by your new supplier.
When you’ve chosen a deal, checked the paperwork and understand the terms and conditions (including how long your contract lasts), you can confirm the switch. After this, you’ll be told when the switch will take place. The whole process typically takes around 17 days up to a maximum of 21 days.
How much could you save by switching business electricity?
Savings can vary significantly depending on a number of factors including:
- Energy usage
- Size and location of your business
- The energy tariff and length of your contract
Ultimately, the bespoke nature of business electricity deals means the best way to find out how much you could save is to compare business energy prices with a range of different suppliers.
Will your business electricity supply be disrupted when you switch?
Switching your supplier won’t affect your electricity supply in any way whatsoever. The only difference you should notice is lower business electricity bills.
Who is the cheapest business electricity supplier?
Business electricity plans regularly change as deals are updated to reflect wholesale electricity prices. As a result, it’s tricky to pinpoint who the cheapest supplier is at any one time.
To find the most up to date business energy costs in England and the rest of the UK, you’ll need to compare rates and tariffs.
Who is the best business energy supplier?
With so many different types of UK businesses, the best supplier for you and your firm will be one that can fulfil your needs and expectations.
Although lower rates will play a part in which supplier you choose, don’t forget other features such as customer service and commitment to renewables are important too. In particular, think about supplier reliability. Frequent outages, no matter how short, can interrupt the smooth running of your business. The result isn’t just reduced efficiency, it can also lead to financial losses.
Can you switch business electricity supplier if you’re tied to a contract?
If you’re still in contract, but want to leave early, you can expect to pay hefty exit fees. This is typically the case if you’re tied to a fixed rate tariff.
If you are actively looking to switch your business electricity suppliers, it’s really best to wait until your switching window opens. This window is your notice period but the length can vary according to the supplier. Typically, it’s at least one month before your contract is due to end.
Why is business electricity so expensive?
Your business electricity is likely to be expensive if you haven’t switched tariff since your previous contract ended. Otherwise, business electricity tends to be cheaper per kWh because businesses tend to use more electricity than homes. Business use is also typically more consistent, both of which are reflected in lower rates.
Can I buy business electricity if I run my business from home?
Yes, if you work from home, you can benefit from lower business electricity prices by taking out a business energy contract. However, there are usually conditions — for example, suppliers often specify a minimum amount (usually 50%) must be used for work purposes.
It’s worth pointing out that you don’t need to be a limited company to benefit from this. Sole traders and micro businesses with fewer than 10 employees are eligible too.
Can you get a smart meter for your business?
The government wants all households and small businesses to have a smart meter by 2025 but it’s up to individual suppliers to manage the roll out.
If your new supplier is able to, you should be provided with a smart meter which can help you monitor your electricity usage.
How to save money on your business electricity
Switching to a new supplier is a quick and effective way to lower business electricity bills but it’s not the only way to keep energy costs down — other things you can do, include:
- Turning off the lights — research shows that lights consume between 35% and 40% of all business electricity. Switching them off or replacing them with more efficient LED bulbs can help you make significant savings.
- Turning down the heat — figures from the Carbon Trust reveal that heating accounts for up to 40% of energy use in business premises. You can keep bills in check by keeping temperatures consistent — just 1°c of overheating leads to an 8% increase in costs.
- Switching off computers — the Carbon Trust also found that businesses could cut energy use by 75% every year just by turning computers off at night and at weekends.
- Raising staff awareness — remind staff to switch off lights and electricals on a regular basis.
Compare business electricity quotes and switch to a better deal
Switching to a new energy supplier really can cut business electricity bills and help add more to your bottom line. What’s more, you can start your business electricity comparison right here — saving doesn’t get any easier.